"Happy Road" Lost More Than 200 Million &Nbsp In 3 Years; Lining'S Multi Brand Strategy Was Defeated.

In March 16th,

Lotto loss for 3 years

According to Lining's 2010 earnings report, Lotto brand profit before interest plus depreciation and amortization was 91 million 749 thousand yuan, while the index was 56 million 935 thousand yuan in 2009.

For Lotto continuous losses, Lining pointed out that "Lotto (Le Tu) brand is still in the initial stage of development and promotion, and has undertaken higher product research and development and brand promotion expenses."

However, reporters found that the loss of Lotto has actually lasted for 3 years.

From 2008 to 2010, Lining reported that in 2008, the Lotto brand lost 12 million 400 thousand yuan. In 2009, the loss of Lotto brand increased sharply to 76 million 910 thousand yuan, while in 2010, the loss of Lotto brand further jumped to 112 million yuan.

The brand business has lost 3 years, with a total loss of 201 million 300 thousand yuan.

For Lotto's unsatisfactory performance, Lining pointed out: "in 2010, the group continued to expand its brand development channels for Lotto (Le Tu).

However, influenced by market environment and competition factors, the growth rate of Lotto (Le Tu) brand business in 2010 was slower than expected.

Lining added that the Lotto (Le Tu) brand strategy was adjusted in a timely manner in the middle of the year, laying stress on store retail performance and profitability, reasonably controlling the speed of developing channels and the distribution structure of shop formats, and selecting key markets for business breakthroughs. "At present, the business is gradually stepping into a healthy development track."

In July 31, 2008, Lining signed a contract with the sports fashion brand Lotto from Italy, and obtained the exclusive concession of the Lotto trademark for 20 years. It can develop, manufacture, marketing, publicize, promote, distribute and retail the licensed Lotto (Le Tu) brand in China.

For this reason, Lining has paid an average of 19 million 690 thousand yuan per year since 2008.

Moreover, Lining's other brand, red double happiness, was not optimistic in 2010.

According to the financial report, in 2010, the brand profit of red double happiness was 71 million 870 thousand yuan, a decrease of 2.1% compared with the previous year.

The past and present of Kappa

The story of Lotto is always reminiscent of Lining's past story with Kappa. Zhao Yu pointed out that "Lining once again won the international agency's right to China's famous brand. To some extent, it is Lining's re test of the high-end strategy and hopes to further challenge the dominance of the international brand."

In February 2002, Lining signed a concession agreement with the real owner of Kappa brand and Italy brand holder BasicNet. However, after the 5 year contract expired, Lining gave up Kappa.

However, who is away from the post Lining trend in China for the precise positioning of Kappa fashion sports, so that the operation of the brand is thrived.

After "missed" Kappa, Lining won the franchise of Lotto20 for 934 million yuan.

In 2007, the Lining brand contributed $4 billion 244 million to Lining, but Lining's other brands only contributed 104 million yuan to Lining, accounting for 2.4% of the total revenue.

Then in 2008, Lining reached a partnership with Lotto, which also showed Lining's eyes on China's fast-growing sports and fashion market.

However, after 2008, the brand obviously failed to achieve the expected performance. "Lotto, as an internationally famous brand, has entered the Chinese market and has always been in a state of climate change."

Zhao Yu pointed out that "on the one hand, the product line has not received enough demand support in the Chinese market, and on the other hand, it lacks enough marketing promotion, which is rather somewhat vague.

Lining's intervention also did not fundamentally solve the Lotto's long-term problems. "

"The success of Kappa is that it has a clearer market position and a natural international background, and is recognized by both the consumer and the capital market."

Zhao Yu said.

"For Lotto, it has not yet given the core value of consumer recognition, and the so-called high-end brand also needs to be clearer, especially from product level support."

Zhao Yu added.

"Specialization is one of the important directions in the development of sporting goods industry. Lining has strengthened the specialization of table tennis and badminton through mergers and acquisitions, and there is no problem at the strategic level.

Just because of the characteristics of the pingpong feather project, the space and potential for development are relatively limited.

Zhao Yu added.

At the same time, Zhao Yu said, "if we take into account the characteristics of professional brand projects, some relatively small sectors may remain relatively stable over a long period of time at the sales level, but that does not mean that such a merger strategy is a failure.

At some point, Lining's horizontal M & a strategy is more important in terms of brand and product structure.

However, in the process of multi brand operation, whether it can be consistent with the brand's development strategy and market demand will become the core criterion of judgement.

Zhao Yu sighed that when Lining changed his mind drastically, "multi brand strategy also needs to be changed."