Strategic Failure Lining CEO Zhang Zhiyong Quit Lining Personally In Command

Yesterday, Lining Limited announced that Zhang Zhiyong retire from the company CEO, founder Lining and Jin Zhenjun will become a direct leader of the company. At the same time, the company announced the future and short-term restructuring plan to improve the company's high inventory problems, to cope with the sharp decline in net profit.

Lining himself is in command.

In a notice issued by the stock exchange of Hongkong, the Li Ning Co said that since July 4th, Chi-Yung Chang We will retire from the company's CEO and will no longer serve as executive committee member of the board of directors on the same date. However, in order to ensure a smooth spanition of the company's management before the new CEO arrives, Zhang Zhiyong will continue to serve as the executive director of the group, serving as the principal adviser to the Executive Committee of the group, and can charge up to $3 million 700 thousand in consultant fees.

The announcement did not disclose the specific reasons for Zhang Zhiyong's resignation. "The board of directors and Mr. Zhang agreed that for the next stage of development of the group, it is the right time to introduce the new management team." It is understood that Zhang Zhiyong served in the Li Ning Co for 20 years, leading the 2009 Lining's brand spanformation strategy. According to public reports, Zhang Zhiyong, the then Li Ning Co CEO, reviewed his mistakes in brand development, crowd positioning and other strategic formulation in his 2012 New Year address.

Before hiring the new CEO, Lining, the founder and executive director and director of Li Ning Co, went on to fight again, mainly responsible for Li Ning Co strategy, external affairs and relations. Jin Zhenjun, the new executive director and executive vice president, will be responsible for the internal affairs and operation of the group. In addition, Su Jingshi, chairman and chief executive officer of China business division of Yum group, has also become an independent non-executive director of Lining group.

The industry believes that the high-level organizational structure adjustment for Li Ning Co efforts to build world-class brands to take action. In a certain period of time, for the company's long-term development, it is one of the important means of self spanformation to manage the structural adjustment or introduce new management team at the right time. This is also evident in another Chinese national brand representative, Lenovo Group (micro-blog).

　 Solve Stock This is a pressing matter of the moment.

In the past few years, Li Ning Co has been developing slowly, facing many problems, such as weak order growth, high inventory, internal management confusion and so on.

Lining once faced a great situation after the Olympic Games, but he positioned the target market in the "post-90s" group and lost the favor of middle-aged people who were originally the main consumer groups. According to public information, Lining's profits were exceeded by Anta in 2010. In 2011, Lining announced that it had thrown 300 million yuan for inventory repurchase, and its stock rose by 40%. The net profit for the whole year was only 386 million yuan, a decrease of 65%. In those days, Lining's share price also fell 61%. In June this year, Lining announced the year-round order in 2012, and the annual new product order will be lower than that of last year.

"Sales in our store are not ideal this year, and revenue has dropped significantly." A staff member of a Lining store in Banan District told reporters yesterday in an interview. "Not only is our family, but the sales of nearby sports brand clothing are not good. I think the sporting goods industry is not very optimistic now."

Yesterday, Jin Zhenjun told the media that the company is now in a difficult period of adjustment. The sports industry has developed rapidly in recent years. At present, solving the problem of high inventory is the company's "urgent matter". Lining public relations staff Li Wei confirmed to our reporter that there is no definite timetable for solving the inventory problem, and is expected to improve in the current year.

Goldman Sachs also pointed out in its report that the focus of the market has shifted to the development of casual clothing, which poses challenges to the sporting goods industry in the mainland, especially to sports clothing companies. Moreover, "Lining needs time to restructure the brand image and reverse the current business losses. It is expected that the company will not make any positive contribution in the short term."

Improvement in the next three stages

Not long ago, Lining group was questioned by a number of agencies for sponsoring the CBA and shortening the concession period of Italy brand Lotto. Yesterday, in the announcement, the Li Ning Co released three phases of improvement plan, and also explained the previous institutional challenge to Lining.

Jin Zhenjun told the media yesterday that the performance of Li Ning Co this year is not very good on the surface, but this is the company's initiative to make decisions for future development, and boldly invest some costs, including sponsorship of CBA.

According to the briefing, Lining's first phase of short-term measures has begun to be implemented, including focusing on retail terminal sales and cleaning up channel inventories, improving the cost structure of products and operations, focusing on domestic markets and core products. "Lining will invest more in core products and businesses, which does not mean that it will change the past horizontal multi brand strategy." Li Wei told reporters.

The second stage will improve the supply chain management, marketing and product planning models, and provide more first-class products and customer experience. The third stage will ensure that the group has the right business model to achieve the goal of improving profit structure and channel, retail efficiency, cash and ROI.

"The announcement we have issued today is the board and the management for more than a few months to listen carefully to the views of all parties inside and outside the company, to assess the current business situation in the company, including the internal and external challenges we face, and to take into account the future and long-term prospects of the company." Lining said. In view of the development of domestic sports brands, Lining thinks there is still room for it.

In addition, yesterday, when the reporter asked Li Ning Co Chongqing manager about the operation of the Lining store in Chongqing, and whether the layout of the Chongqing market would be adjusted, the responsible person said no company instructions were inconvenient to disclose to the media.

Expert opinion

Can Lining work together?

Many industry insiders said publicly that Lining's three stage plan is crucial. If it can be implemented thoroughly, it is expected to bring Lining back to a good track of operation.

Zhang Qingceng, a sports brand expert, worked in the Li Ning Co. He admitted that Zhang Zhiyong had been brilliant in Lining, but the failure of strategic spanformation made Lining not yet recovered. Zhang Qing believes that Lining's three stage plan can consider two pronged approach. On the one hand, we must grasp basic and even more pragmatic measures that are directly related to business. On the other hand, we must also consider that Lining is a Brand Company after all. The strategy of vague swing is certainly not acceptable. The practice of brand remolding in the past proved to be unsuccessful, so we need to have a successful strategy at the end of the brand.