Li Ning Co Spain Authorized Application For Bankruptcy

Lining's bad news is still intact.

In July 9th, a number of Spanish mainstream media reported that Lining was located.

The subsidiary has applied for bankruptcy.

The Spanish based subsidiary has signed agreements with several Spanish football clubs in the name of Lining, including Seville, a well-known domestic fan.

The reporter then verified to Lining, Lining related media chief clarified that "the application for bankruptcy is not Lining's subsidiary, but Lining's authorized dealer in Spain".

However, an insider pointed out that "this incident shows that Lining's performance in Spain is not good, after which the performance of North American branches is also bleak."

Lining's own data revealed that in 2011, Lining accounted for 1.9% of the overseas market.

"Lining group will focus on developing the core Chinese market."

Lining relevant media chief said.

With the end of the Zhang Zhiyong era, Lining began the restructuring of the domestic market.

Overseas predicament

On the 9 day, Lining said in an interview with reporters that headquarters had received an e-mail notification from LNPLUSIBEROAMERI-CAS.L., Spain's authorized company, in July 4, 2012, and filed for bankruptcy because of the deterioration of the Spanish market environment and its poor management.

At the same time, Lining added that the Spanish authorized company signed some sponsorship agreements in its own name. Lining is now actively assisting the authorized company to solve the remaining problems after its bankruptcy, including helping its sponsoring clubs acquire equipment.

It is difficult for the international market to open up the common failing of the domestic sports brand. As the leader of the domestic sports brand, Lining has a high desire for the international market.

Lining's internationalization began under the layout of Zhang Zhiyong. Although it also entered the European market and the US market at the same time, its internationalization attempt has been criticized by the media.

"In order to open up the international market, domestic sports brands have made many attempts, but these attempts are not truly internationalized."

A sports brand executive pointed out that due to the lack of core technology, the domestic sports brand hopes to achieve some effect by taking advantage of the sword, and its ultimate goal is to "incense outside the wall". The purpose of domestic brands to do international market is to create a certain influence that will affect the sales of the domestic market.

In the face of the delayed international market, Lining said in an interview with reporters that he is still concentrating on the domestic market.

"Lining group will focus on developing the core Chinese market.

In the international market, we will explore under the way of controllable risk.

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Domestic reform

Zhang Zhiyong's departure is seen as a failure of the previous brand reconstruction.

Facing the legacy of previous reforms, Lining disclosed the latest "rescue" measures.

Lining said that the latest reform measures will be carried out in three steps.

"Phase I initiatives have been launched, including focusing on retail terminal sales and cleaning up channel inventories, improving the cost structure of products and operations, strengthening organization and execution capabilities, improving channel efficiency, profitability and performance, focusing on core products and domestic markets, as well as enhancing brand input and improving marketing efficiency."

A long-term tracking Lining industry insiders pointed out that Lining's current problem is that the inventory backlog is serious and the finance is extremely tight.

Lining annual report data show that the average annual inventory turnover in 2011 was 73 days, an increase of 21 days compared with the 52 day of last year, almost double the fastest turnover of Anta sports, and high inventory caused Lining to be harassed.

The annual report shows that Lining's inventory in 2011 was 1 billion 133 million yuan, an increase of 40.64% over the 806 million yuan in 2010.

In addition, Lining's retail store in 2011 reached 8255, a net increase of 340, calculated by a single store income of 10 billion 816 million yuan, down 9.68% compared to the same period.

In addition, higher inventories increased Lining's inventory provision to 188 million yuan in 2011, an increase of 63.48% over the same period in 2010.

Cleaning up the stock has become a step that Lining has to go now.

"Only when the inventory is cleared and the health of the channel is ensured can other plans be discussed, otherwise everything will be empty talk."

The industry said.

After solving the urgent need, Lining's long-term reform is also gradually clear.

The second phase will be implemented from 2013 to 2014, and is now in the pilot stage, including improving supply chain management, marketing and product planning models, and providing more first-class products and customer experience.

The third phase is scheduled to be implemented in the next 2 to 4 years, and has been planned to focus on improving business models to enhance the profit structure of companies and channels, to better meet market demand on product and consumer brand experience, and to improve retail efficiency and cash.

Build a virtuous circle.

Lining's latest plan has also been interpreted as one of the important changes made after TPG's involvement in management.

In January 2012, Lining issued convertible bonds with a 4% interest rate of 5 years to private equity fund TPG and investment company GIC. At the same time, Lining's short-term bank loans increased 168% over the same period.

Lining's financing cost increased 90% in 2011.

Among them, TPG has been involved in Wuming supermarket, Daphne and other enterprises, through management intervention, once helped Daphne's performance significantly improved.

The insiders pointed out that the reform is likely to be handled by Lining's strategic investors just introduced.

According to the conditions signed by TPG and Lining, TPG has the right to nominate two non executive directors to the board of directors and the right to nominate a director (or other independent non-executive director) as a member of the audit committee, nomination committee and Remuneration Committee, and has the right to nominate two executive directors as members of the Executive Committee.

Now, Lining announces that TPG member Jin Zhenjun will be in charge of CEO with Lining.

Independent analyst Ma Gang pointed out that Lining's problem at the very beginning was that the direction of the high-level decision-making was not uniform, and the execution was not firm.

Dealer channels, brand value problems and marketing problems have emerged.

Now Lining's reorganization of the top team is trying to solve the problem from the root.

The unity of thought and direction can solve the problems of action and execution.

Next, we need to focus on how the Lining team performs the professional sports return and cooperate with the professional sports strategy from products and channels.