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    Li Ning Implemented Three Stages To Improve The Current Situation

    2012/7/10 10:15:00 34

    Li NingZhang ZhiyongOlympic Games

       Li Ning In the announcement issued by the Stock Exchange of Hong Kong, the company said that Zhang Zhiyong had resigned as CEO of the company since July 4, and no longer served as a member of the Executive Committee of the Board of Directors since the same day. However, in order to ensure a smooth transition of the company's management before the new CEO takes office, Zhang Zhiyong will continue to serve as the executive director of the Group, serving as the chief consultant of the Group's executive committee, and can charge up to 3.7 million yuan for consulting fees.


    The announcement did not disclose Zhang Zhiyong The specific reason for leaving office is that "the Board of Directors and Mr. Zhang agreed that it is the right time to introduce a new management team for the development of the Group in the next stage." It is understood that Zhang Zhiyong has served in Li Ning for 20 years, leading the brand transformation strategy of Li Ning in 2009. According to public reports, Zhang Zhiyong, then CEO of Li Ning, reviewed his mistakes in brand reconstruction, crowd positioning and other strategic formulation in his 2012 New Year speech.


    Before employing the new CEO, Li Ning, the founder, executive chairman and director of Li Ning, went to war again and was mainly responsible for Li Ning's strategy, external affairs and relations. The new Executive Director and Executive Vice Chairman Jin Zhenjun will be responsible for the internal affairs and operations of the Group. In addition, Su Jingshi, chairman and CEO of Yum Brands China Business Unit, has also become an independent non-executive director of Li Ning Group.


    Industry insiders believe that this time, the high-level organizational structure is adjusted to make Li Ning a world-class company brand Action taken. In a specific period, for the long-term development of the company, the board of directors of the company will adjust its management structure or introduce a new management team at an appropriate time, which is one of the important means to carry out self transformation. This is particularly evident in Lenovo Group, another representative enterprise of China's national brand.


    Solving inventory is a top priority


    In the past few years, Li Ning Company has developed slowly, facing many problems such as weak order growth, high inventory, and chaotic internal management.


    Li Ning is in Olympic Games After that, they once faced a good situation, but they targeted the market at the "post-90s" group, losing the favor of middle-aged people who were originally the main consumer groups. According to public data, Li Ning's profits were exceeded by Anta in 2010; In 2011, Li Ning announced that it would spend 300 million yuan to buy back its inventory. The inventory increased by 40%, but the annual net profit was only 386 million yuan, down 65%. In that year, Li Ning's share price also fell by 61%. In June this year, Li Ning announced the order situation of the whole year of 2012, and the amount of the annual new product order meeting will decrease by a high percentage of units compared with last year.


    "The sales in our store this year are not ideal, and the income has declined significantly," the staff of a Li Ning store in Banan District told reporters in an interview yesterday. "Not only our family, but also the nearby sports brand clothing sales are not good. I think the current market of sports goods industry is not very optimistic."


    Yesterday, Jin Zhenjun revealed to the media that the company is now in a difficult period of adjustment. After the rapid expansion and development of the sports industry in the past few years, it is the "urgent matter" for the company to solve the problem of high inventory. Li Wei, a staff member of Li Ning's Public Relations Department, confirmed to our reporter that there is no clear timetable for solving the inventory problem, which is expected to improve this year.


    Goldman Sachs also pointed out in the report that the focus of the market has shifted to the development of leisure clothing, which poses challenges to the sports goods industry in the mainland, especially to enterprises operating sports clothing. Moreover, "Li Ning needs time to restructure its brand image and reverse the current business losses. It is expected that the company will not make positive profit contributions in the short term."


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    Improvement in the next three stages


    Not long ago, Li Ning Group was questioned by many institutions for sponsoring the CBA (China Men's Basketball Professional League) and shortening the franchise period of the Italian brand Lotto. In the announcement yesterday, Li Ning Company released an improvement plan implemented in three stages, and also explained the previous agency's doubts about Li Ning.


    Jin Zhenjun revealed to the media yesterday that the performance of Li Ning Company this year was not good on the surface, but it was the company's initiative to make a decision for future development, and boldly invested some costs, including sponsoring CBA.


    It is reported that Li Ning's short-term measures in the first stage have been implemented, including focusing on retail terminal sales and clearing channel inventory, improving the cost structure of products and operations, and focusing on domestic market and core products. "Li Ning will invest more in core products and businesses, which does not mean that it will change its previous horizontal multi brand strategy," Li Wei told reporters.


    The second phase 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 a suitable business model to achieve the goal of improving the profit structure and channels, retail efficiency, cash and return on investment.


    "Our announcement today is the result of the efforts made by the board of directors and the management after carefully listening to the opinions of all parties inside and outside the company for many months, evaluating the current business situation of the company, including the internal and external challenges we face, and taking into account the medium - to long-term outlook of the company in the future." Li Ning said. Li Ning believes that there is still broad space for the development of domestic sports brands.


    In addition, yesterday, when the reporter asked the Chongqing head of Li Ning Company about the operation of Li Ning stores in Chongqing and whether the layout of the Chongqing market would be adjusted, the head said that there was no company instructions, which was inconvenient for the media to disclose.


    Expert opinion


    Can Li Ning do both


    Many insiders publicly said that the three-stage plan adopted by Li Ning hit the nail on the head. If it can be thoroughly implemented, it is expected to pull Li Ning back to a good operating track.


    Zhang Qing, a sports brand expert, once worked in Li Ning Company. He said frankly that Zhang Zhiyong had a brilliant career in Li Ning, but the failure of strategic transformation has not restored Li Ning. Zhang Qing believes that whether Li Ning's three-stage plan can consider two pronged approach. On the one hand, we should focus on basic, even more pragmatic, business related initiatives; On the other hand, it is also necessary to consider that Li Ning is a brand company after all, and the strategy of fuzzy swing is definitely not feasible. The past practice of brand remodeling has proved unsuccessful, so it is necessary to have a successful strategy on the brand side.

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