For the first time, a classic menswear brand name appeared on the sponsorship list of an off-road running race.
Recently, the SKYLINE Off-road Series was launched in Shanghai. HLA GROUP appeared as a core partner through its professional sports brand &#34;HLA POW Lan Run,&#34; exclusively sponsoring two high-altitude events at Basum Tso and Helan Mountain.
In the past two years, from the Wuxi Marathon to the &#34;Su Super&#34; City Football League, and then to Jiangyin &#34;Village BA&#34; and the Chinese Men's Basketball warm-up matches, HLA GROUP has been continuously increasing investment in sports scenarios, attempting to reshape &#34;Men's Wardrobe&#34; through events, communities, and brand IP.
However, in more realistic business terms, this high-frequency exposure has not brought about proportional growth.
In 2025, HLA GROUP achieved revenue of 21.626 billion yuan, a year-on-year increase of 3.19%, while profit growth nearly stagnated. The main brand has reached its ceiling in first- and second-tier markets, and diversified businesses have yet to form effective support.
&#34;Selling their own clothes&#34; is becoming increasingly difficult. HLA GROUP began to ponder: Could they leverage their over twenty years of offline channel management capabilities to sell other people's clothes?
Over the past two years, HLA GROUP has begun trying to answer this question.
Through its subsidiary &#34;Siboz Brand Management (Shanghai) Co., Ltd.,&#34; the company simultaneously undertook two seemingly different but logically similar businesses: the Adidas FCC store system and the JD.com Outlet discount channel.
By 2025, the number of Adidas FCC stores had grown from 433 to 723; JD.com Outlets expanded from 12 to 60.
In 2025, &#34;Other Brands&#34; revenue, including diversified independent brands and the aforementioned new businesses, reached 3.447 billion yuan, a year-on-year increase of 29.18%.
The downward path beyond independent brands is gradually becoming clear, but questions arise:
When the former &#34;King of Light Assets&#34; gradually moves into the deep waters of self-operated retail, is this finding a second curve beyond Men's Wardrobe, or merely the prelude to another chapter of inventory risk returning to the balance sheet?
<img src="https://imageproxy.pbkrs.com/https://wpimg-wscn.awtmt.com/349def56-b92d-42ca-b289-3846cc9bec48.png?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" alt="Image" original-src="https://imageproxy.pbkrs.com/https://wpimg-wscn.awtmt.com/349def56-b92d-42ca-b289-3846cc9bec48.png"/>
<h2>The Descent of Sports Giants</h2>
At the end of 2022, HLA GROUP established Siboz jointly with Haixin Sports through its subsidiary. Early on, relying on platforms such as JD.com and Vipshop, it distributed inventory of international brands like Nike, adidas, PUMA, Vans, and ASICS.
In 2023, Siboz realized operating revenue of 597 million yuan and net profit of 85 million yuan, with a net profit margin of approximately 14%, contributing about 34 million yuan in investment income to HLA GROUP.
However, Siboz did not stop at the role of an intermediary for &#34;online inventory clearance.&#34;
In 2023, HLA GROUP established a long-term cooperation with Adidas, raising its shareholding in Siboz to 40%; by 2024, it completed full consolidation, and Siboz gradually transformed into a &#34;channel operator.&#34;
What truly changed the nature of the business was the implementation of the adidas FCC (Future City Concept) project.
FCC stands for &#34;Future City Concept Store.&#34; Within the Adidas system, it primarily targets channel expansion in lower-tier markets. Its product prices fall between those of full-price stores and outlet stores, covering full-label products, out-of-season items, and the early-launched youth-oriented sportswear line &#34;adidas Neo&#34; series.
Regarding specific division of labor, adidas is responsible for exclusively developing product lines adapted for the FCC channel, emphasizing price points with better cost-performance ratios and more casual designs; HLA GROUP controls site selection, store opening, and operations, mastering product mix and sales rhythm through a buyout model.
The advancement of the FCC project coincided with a critical phase of Adidas' inventory repair.
After the pandemic, international sports brands generally entered a de-stocking cycle. Traditional de-stocking paths—such as e-commerce promotions, outlet systems, and channel liquidation—were either inefficient or caused significant impact on the price system.
Some views suggest that FCC, adopting a &#34;customized supply + channel stratification&#34; approach to absorb specific inventory, is a compromise solution. HLA GROUP, leveraging its accumulated channel intuition and operational experience in lower-tier markets, became a key recipient of this model.
In terms of expansion, FCC franchise stores are highly congruent with the classic &#34;HLA Model&#34;: partners bear rent and operating costs without bearing inventory risk; goods are delivered via consignment by Siboz.
According to data disclosed in HLA GROUP's prospectus, as of mid-2025, there were 529 FCC stores in the Chinese market, comprising 236 directly operated stores and 293 franchised partnership stores.
But doubts also exist. As Adidas penetrates lower-tier markets, the dilution of brand power is almost an unavoidable concern.
Tang Xiaotang, a fashion industry analyst at No Agency, told All-Weather Technology that Adidas' move essentially executes a strategy of &#34;trading brand for share,&#34; but the actual effectiveness remains questionable.
Its core doubt lies in whether product lines partially carried by FCC—such as the adidas Neo series, which previously failed in the Chinese market due to inferior price competitiveness against local brands—possess sufficient competitiveness in lower-tier markets.
From an industry perspective, Adidas' performance in China has gradually recovered since the second quarter of 2023 and reached a stage high in 2025, but its growth rate and market share remain under pressure within the overall footwear and apparel market.
Another senior footwear and apparel consultant pointed out to All-Weather Technology that the overall downward trend of street-side stores is hard to reverse, and the growth space for FCC stores on top of the existing stock may be limited.
Despite this, the pace of cooperation between the two parties continues to accelerate significantly.
At the end of 2025, HLA GROUP and Adidas announced the co-building of a &#34;Sports+&#34; ecosystem, extending the boundaries of cooperation from channel distribution to event operations, product co-creation, public welfare actions, and cultural communication. &#34;Lan Run Study Society&#34; has become the core carrier for their marketing co-creation. Its event IP, &#34;HLA POW King God Challenge,&#34; has attracted over 10,000 runners to sign up, with live broadcast viewership exceeding one million.
Channel remains the foundation of all this. By the end of 2025, the number of Adidas FCC stores operated by Siboz reached 723, with a net increase of 290 stores throughout the year.
<h2>The &#34;Transshipment Station&#34; for Leftover Goods</h2>
After FCC successfully established the basic framework of &#34;Big Brand Cooperation + Leftover Goods + Lower-Tier Markets,&#34; HLA GROUP attempted to replicate and generalize this model to build a multi-brand, full-category discount retail matrix.
In July 2024, HLA GROUP reached a strategic cooperation agreement with JD.com Group to jointly promote the Olay omnichannel business, giving rise to the operating entity Shanghai Jinghai Outlets.
In March 2026, JD.com further increased its capital injection through Suqian Hanbang, locking its shareholding at 20% (HLA holds 70%), completing a deep long-term binding at the equity level.
Regarding collaborative division of labor, JD.com provides traffic and brand endorsement, Siboz handles procurement and online operations, while HLA GROUP leads its most moat-protected offline site selection and store management.
JD.com Outlets exhibit obvious &#34;Light Asset + Consignment&#34; characteristics.
According to calculations by Founder Securities research reports, approximately 90% of its goods adopt the consignment model, while about 10% of hot-selling items use the buyout model. Under the consignment system, after goods are sold, HLA GROUP takes about 40% of the split, and unsold risks are returned to the supplier.
On the channel side, JD.com Outlets cooperate with shopping centers on a commission basis, where malls typically charge only 5%-6% rent commission, plus about 3% platform fees.
Compared to the heavy asset buyout model of traditional suburban outlets, this approach significantly reduces capital occupation and inventory risk, resulting in higher turnover efficiency and ROE. Furthermore, by locating in lower-tier markets, it alleviates direct conflict with full-price stores.
The reason this model is feasible for promotion today is also closely related to the industry environment.
Brands are eager to clear inventory pressure through new channels without piercing the price system in first- and second-tier cities; meanwhile, commercial real estate in lower-tier cities faces a recruitment winter and holds an open attitude toward discount formats capable of driving traffic.
Du Bin, Secretary-General of the Brand Professional Committee of the Shanghai Shopping Center Association, pointed out that even top commercial projects like Wanda and Longfor increasingly value the complementary role of discount formats. &#34;Introducing such a flagship store, even sacrificing a few brands, is reasonable.&#34;
Driven by both supply and demand, JD.com Outlets landed quickly, opening 48 stores in the past year.
Its offline stores are mostly located in core business districts of third- to fifth-tier cities, with areas ranging from 3,000 to 5,000 square meters, introducing brands such as adidas, PUMA, and COACH, emphasizing high cost-performance and one-stop consumption experiences.
In the first half of 2025, JD.com Outlets business revenue reached 42.18 million yuan. Under the consignment model, the company recognizes revenue in the capacity of an agent, recording only commissions or commission points, resulting in a gross profit margin of up to 95% on the financial statement.
However, under the consignment model, HLA GROUP's actual control over product procurement, pricing, and the supply chain source weakens.
The aforementioned senior footwear and apparel consultant analyzed for All-Weather Technology that although JD.com Outlets can currently access international brand leftover goods, it is limited by China's tight distribution system and finds it difficult to reach the inventory of domestic brands like Anta, Li-Ning, and LILANZ, which are the &#34;basic ground&#34; of lower-tier markets.
In horizontal comparison, overseas city outlet leader TJX relies on a buyer system for &#34;opportunistic buyouts&#34; to build a moat in product selection and negotiation. In contrast, JD.com Outlets' competitive barrier currently remains at channel dividends and site selection inertia.
A deeper concern lies in that when inventory risk is simply transferred to brands rather than hedged by terminal retail capabilities, superficial channel prosperity can easily mask sluggish supply chain perception.
Will this &#34;channel integration&#34; dependent on external brand halo empowerment slide again into the inefficient cycle experienced by HLA's main brand?
<h2>Heavy Burden of &#34;Light Assets&#34;?</h2>
HLA GROUP's joint venture + returnable model once granted it significant operational redundancy.
Upstream, the company shifted unsold risk to suppliers through credit-based purchasing combined with &#34;returnable&#34; clauses; downstream, franchisees acted more as &#34;financial investors&#34; providing funds and bearing operating expenses, sharing revenue proportionally.
Through this structure, HLA GROUP achieved parallel scale expansion and high profits without occupying excessive funds or bearing complete inventory risk.
During founder Zhou Jianping's era, HLA GROUP was once an industry &#34;money-making machine&#34;: net profit margins remained above 20% for a long time, and ROE reached as high as 30%.
However, the essence of the &#34;light asset model&#34; is leveraging supplier and franchisee funds to drive scale through brand power and channel power. Its premise is that channels and brands must be sufficiently strong.
But this premise is crumbling.
In recent years, despite signing stars such as Lin Gengxin, Pan Zhanle, and Zeng Shunxi as spokespersons, the stereotype of &#34;Men's Wardrobe&#34; has gradually solidified into &#34;Dad's Wardrobe,&#34; and brand appeal continues to decline.
Once terminal sales cool down, the operating expenses borne by franchisees will fail to cover share returns, leading to a surge in store closure intentions, shaking both overall scale and supply chain bargaining power.
From this perspective, many adjustments made by HLA GROUP, including new businesses, are not an active choice to &#34;become heavy,&#34; but a path forced towards the essence of retail after the original model failed.
In terms of channel structure, the company has continued to promote &#34;reducing franchises, increasing direct operations&#34; in recent years. By the end of 2025, the proportion of directly operated stores among all brand stores had risen to 32.4%, an increase of nearly 17 percentage points compared to three years ago.
Directly operated stores achieved a gross profit margin of 62.6% in 2025, far exceeding the 40% of franchise stores, but rising costs such as sales wages and rent caused the overall selling expense ratio to rise by over 5 percentage points compared to three years ago, reaching 23.8%.
If changes in the channel side mean &#34;cost shift upward,&#34; then changes in the inventory side mean &#34;risk returning to the balance sheet.&#34;
As of the end of 2025, the book value of the company's inventory stood at a high of 10.819 billion yuan, with inventory turnover days climbing to 344 days, an increase of 14 days from the previous year. Correspondingly, the company accrued 495 million yuan in inventory impairment provisions for the year, bringing the cumulative inventory impairment provision to 941 million yuan.
Investment in new businesses further amplifies this trend.
Whether it is the FCC model led by Siboz or the outlet format cooperated with JD.com, both are essentially closer to &#34;self-operated retail,&#34; requiring the company to participate more directly in product organization and turnover, and bear corresponding unsold and impairment risks.
In 2024, HLA GROUP's inventory scale increased from 9.337 billion yuan to 11.987 billion yuan. The surge in &#34;non-returnable&#34; inventory was mainly due to the consolidation of inventory after Siboz's inclusion in the consolidated statements.
In 2025, HLA GROUP's minority shareholder loss was -34 million yuan (the company holds 51%/70% in Siboz/Jinghai respectively), indicating on the side that new businesses are still in a loss state.
Market analysis suggests the reasons are Siboz accruing inventory impairments and JD.com Outlets still being in a ramp-up period.
Additionally, to support Siboz in purchasing goods from Adidas, HLA Group provided guarantees for accounts payable amounting to as high as 800 million yuan.
Against the backdrop of the main business still undergoing adjustment, upfront investments in new businesses ultimately caused HLA GROUP's net profit margin to decline further: in 2025, the attributable net profit margin decreased by 0.3 percentage points year-on-year to 10%.
Whether it is the channel expansion of FCC stores or the light asset replication of JD.com Outlets, they ultimately need to answer the same proposition: When the moat of &#34;returnable&#34; goods is filled, can HLA GROUP really support a new growth curve with its self-operated retail capabilities?
The answer has not yet been revealed, but the time left for HLA GROUP to trial and error is not much.

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- HLA, a well-known men's clothing brand, made its debut as a sponsor in the SKYLINE Trail Series with its sports brand HLA POW, aiming to reshape the "men's wardrobe" through sports events.  
- Despite revenue growth to 216.26 billion yuan in 2025, profit growth has stagnated, prompting the company to explore new channels for selling other brands' clothing through its subsidiary, Stbox.  
- As HLA transitions towards self-operated retail and adopts models like the Adidas FCC project, the sustainability of profitability remains uncertain amid increasing inventory risks.

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