Lining Causes Local Sports Shoes And Clothing Brand Spanformation "Anxiety"

Lining's high-rise was "earthquake" again. According to Li Ning Co Ltd (hereinafter referred to as Lining) recently issued a notice, the original Lining brand Xu Maochun, chief product officer, no longer held the original position in November 13, 2011. Lining, the brand of sports shoes and shoes, explained that "resignation for family reasons".

This is the fifth executives left by Lining this year after Fang Shiwei, Guo Jianxin, Wu Xianyong and Zhang Xiaoyan. stay Performance data In the face of the overall downturn, executives have repeatedly left their jobs. Lining's brand remodeling plan since the second half of last year has not been recognized by the industry. Related comments pointed out that "big brother" Lining's personnel adjustment means that the local sports brand will enter a comprehensive. Transformation Period It is not known whether the deer is dead or not.

Fifth executives leaving

Lining announced in October 14th that "Mr. Xu Maochun, the chief product officer of the former Lining brand, has resigned for family reasons and will take effect in November 13, 2011".

At the same time, Lining also announced the new organizational structure and personnel adjustment. According to the information provided by its announcement, Lu Ning, general manager of Lining's brand sales and operation, will be the chief operating officer of the company. He will be responsible for coordinating Lining's brand sales headquarters and the three major business segments, namely, the sales area, products and supply chain, to assist the CEO in improving the operational efficiency.

In addition, Lining also said that he will integrate the functions of products and supply chain, set up general manager of shoes products and general manager of clothing / accessories products, report to Chief Operation Officer, and plan product design, development and production management, reduce costs and improve efficiency.

In May of this year, Lining, the chief brand of the company, the 3 chief executives of Wu Xianyong, chief operating officer Guo Jianxin, and Wu Xianyong, general manager of Lotto business department, had been "hanging their boots". Before the announcement of Xu Maochun's departure from the industry, Zhang Xiaoyan, the director of the company's government and public affairs department, confirmed that he had left the Li Ning Co. So far, Lining has left 5 executives this year.

An industry researcher who declined to be named told the daily economic news reporter that the resignation of senior executives undoubtedly sent a negative message to the market. He had to wonder whether Li Ning Co executives had "another job" because of the bottleneck in the spanformation of the Li Ning Co.

In this regard, Lining explained in the announcement, "the group will continue to cooperate with the group's spanformation and strategic implementation needs, optimize the organizational structure, and strengthen business implementation and performance appraisal. In this process, the adjustment of organizational structure and management is a normal phenomenon. The group has sufficient talent pool to meet the needs of business development and ensure stability.

Lining will have "big action"?

The signal that executives leave frequently is probably not so simple. Insiders said in an interview that this may be related to Lining's next big change.

Beginning in June last year, it announced that the brand remolding began, and in the 20 years of the Chinese local sports brand industry, Lining began a controversial journey.

In June 30, 2010, Lining announced a brand restructure in Beijing with a high profile. At the same time, he issued a new brand logo and brand slogan, pointing the brand positioning directly to the "post-90s". But the industry believes that sports brands are difficult to divide their consumption groups from age. Another aspect of "change" is the overall slide in its performance data.

Lining's semi annual report released in 2011 showed that its income, gross profit and basic earnings per share were lower than those in the same period in 2010. The total revenue declined by 4.8%, gross profit decreased by 6 percentage points, and the decline in basic earnings per share was even 49.7%. In addition, from the point of view of profitability, Lining's brand reinventing the "answer sheet" over the past year has not been satisfactory, and its gross margin and operating interest rate have declined to varying degrees.

In an interview with reporters, Ma Gang, an independent critic of the industry, pointed out that although it is too early to evaluate the success of its spanformation, Lining's "brand remolding" effect has not been remarkable for more than a year. In his view, Li Ningxin's brand positioning is too prominent "new cutting-edge", while ignoring the inheritance of the old brand; in addition, the establishment of new brand is not simply a "change the slogan", but needs to cooperate with the company's overall image and product design.

Ma Gang also revealed that Lining's new chief operating officer Lu Ning actually gained more power than Guo Jianxin. In addition, some R & D designers of Li Ningzi brand "Yue Road" are also beginning to work in Lining's main brand. From all kinds of signs, executives' frequent changes may be just the prelude of Lining's next "big moves".

Yesterday (November 14th), reporters tried to ask Li Ning Co brand department about product strategy related plans, but as of press time, did not receive a response. Ma Gang believes that judging from Lining's recent actions, it is possible to reduce the investment in "happy road" and turn to the main brand.

Data show that in the first half of 2011, the sales cost of Lotto brand increased from 26 million 675 thousand yuan in the same period to 36 million 823 thousand yuan in the same period of 2010, rising by more than 38%, but the gross profit margin of the brand dropped from 43.6% to 31.8%.

Top executives' scarcity leads to brand anxiety

In October 20th, the trend of China also broke the news of replacing CEO twice in 1 years. Why are executives of sports brand unstable?

Ma Gang said in an interview with reporters, local sports brands have entered the "executive scarce period", but some commentaries believe that this reflects the "anxiety disorder" of local sports brands in the spanition period.

One aspect of "anxiety" comes from the squeeze on the market by international frontline brands. As we all know, for the mainland's local brands, the two or three line market is the "base area" to survive, but whether Adidas or Nike, before making relevant plans, they invariably indicated that they would enter the two or three line market of China. A reality that has to be faced is that even though the sales channels of international first-line brands are not yet perfect, the growth rate and performance growth of local sports brands have slowed down this year.

On the other hand, "anxiety" is due to the fact that the domestic market is still in the stage of "vicious competition". Ma Gang pointed out that the competition target of Chinese local brands is "putting their rivals to death" instead of considering the long-term healthy development of the industry.

With the increase of raw material prices, the increase of store rents and labor costs and the squeeze of "invaders", the war of spanformation of a local sports brand will start sooner or later. Ma Gang believes that the main goal of the industry spanformation is to enhance brand bargaining power and added value. Zhu Qinghua, a light industry researcher at CIC, pointed out that the early estimation of the market demand for sports brand enterprises also had a negative impact, resulting in a sharp increase in the stock of enterprises, which forced the spanformation of enterprises. This spanformation requires clear brand positioning, upgrading product differentiation and looking for new profit growth points.

Short commentary

Chinese and foreign sports brand "match point" approaching?

At the end of September, according to reports from the Reuters' Chinese website, China's local sports brand was in a worrying situation because of its aggressive international competitors. The article said that after several years of alarming expansion, local sports brand enterprises such as Lining and China are facing the problems of shrinking profits, slowing sales and outdated product backlog. While China's local brands are struggling, foreign brands such as Nike and Adidas are gaining more and more market share in China with their huge investment R & D and rich sales experience.

About this market cake, a report says that the size of China's fashion apparel market will increase two times over the next ten years to over 1 trillion and 300 billion yuan (about 201 billion 300 million US dollars). This new added value may not exist in the first tier cities that have been bombed everywhere, but China's two or three line or even lower level region. Editor's note, at present, in the inland area of Western China, the international sports brand has been driven directly into the local brand with the first arrival.

It can be said that whoever won the two or three line market won a stage victory in the mainland of China. At the moment, the match point is showing.

Foreign sports brands eat the two or three line market. After many years of deep ploughing of the first tier cities, foreign enterprises launched customized products for China's two or three line target customers, accelerating the pace of development in small and medium-sized cities. Small and medium-sized cities have traditionally been an important market for local brands. Nike and Adidas often promote new products and display their technical strength by way of new stores and discount stores on the one hand. On the other hand, they use low prices to clean up stocks and directly destroy the advantages of local products with the same price, leaving no room for improvement.

The advantages of local brands are exhausted and full rout. Due to the increasing cost of manpower, raw materials, rents, advertising and promotion activities, Lining and China's net profit in the first half of this year fell by 50% and 71% respectively. Shares of other local brands such as Anta, PEAK, XTEP and 31st degree also fell by 30%~50% respectively. In the middle of the year, all enterprises encountered the problem of backlog of inventory. Although it was promoted at a lower discount rate, it was difficult to win consumers' favor due to quality inspection and design.

What is the way of the local brand's Jedi counter attack? From today's reporter's analysis of Lining's spanformation anxiety disorder, we can see that the brand positioning of the local sports brand is still being adjusted, competing with foreign brands, or looking for market blank? Over the years, the "short board" of local brands in R & D has become an important reason for the gap between foreign brands and their brands. Is it a shortage of talents or a cost? This involves the long-term strategic vision of enterprises.