Behind Li Ning'S Personnel Restructuring Reform: Sword And Sword For Development

A series of events, such as the decline of performance, the resignation of the CEO, and the bankruptcy of the Spanish licensor, once again pushed Li Ning into the spotlight.

Li Ning Co., Ltd. (hereinafter referred to as Li Ning Company) announced that Zhang Zhiyong resigned from the position of CEO of the Group as of July 4 and no longer served as a member of the Executive Committee of the Board of Directors. At the same time, TPG partner Jin Zhenjun serves as the executive director and executive vice chairman of the company, and Yum Brands China Business Unit Chairman Su Jingshi serves as the independent non-executive director of the company. Before hiring the new CEO, Li Ning will be led by the founder, executive chairman Li Ning and executive vice chairman Jin Zhenjun.

Li Wei, spokesman of Li Ning, said in an interview with our reporter that the Board of Directors was very grateful to Zhang Zhiyong for his outstanding contributions to Li Ning. Under his leadership, Li Ning has developed into a leading company in China Sports brand 。

　　 Sacrifice the elders and attract external forces

Zhang Zhiyong and Li Ning We have worked together for 20 years. For Zhang Zhiyong's exit, Li Ning himself said, "Zhang Zhiyong and I have the same deep feelings for Li Ning and our friendship. As the head of the company, he has paid a sense of responsibility to Li Ning, and many things are regrettable." "If the performance of Li Ning Company is not good, one person needs to be responsible for it, and Zhang Zhiyong will inevitably be out of the game. The main purpose of this is to push back." According to a sports goods industry person who did not want to sign his name, the first step of Li Ning Company's reform is to de familialize; The second step of reform is to eliminate yuan and aging; The third step of reform is to de Li Ning brand, that is, to remove Li Ning's individual heroism and go global. But after removing all the traditional things, Li Ning has become a "four unlike" brand.

In the eyes of insiders, Jin Zhenjun is not surprised to be the executive director and executive vice chairman of Li Ning Company. On January 19 this year, Li Ning announced that there were two investors subscribing for convertible bonds issued by the Group. One was a member company of TPG, the world's leading private investment company, and the other was a global investment management company managing Singapore's foreign exchange reserves.

According to the agreement signed between TPG and Li Ning, TPG has the right to nominate two non-executive directors to the Board of Directors, and has the right to nominate one director (or other independent non-executive directors) to serve as a member of the Audit Committee, the Nomination Committee and the Remuneration Committee, and has the right to nominate two executive directors to serve as members of the Executive Committee.

Jin Zhenjun is a partner of TPG and a member of the company's operation team. He has served as the regional CEO or general manager of many well-known enterprises in the United States, South Korea and China. Li Wei told our reporter that Jin Zhenjun has profound experience in global and domestic retail industry management and operation, and his record in promoting enterprise transformation has been widely recognized by the industry. "I feel very honored that the board of directors of Li Ning has made me shoulder this important task. I am confident that with the joint efforts of the chairman, a stronger management team, and the support of TPG's rich operational expertise, I will create a world-class platform for Li Ning to operate." Jin Zhenjun said.

Why did Li Ning choose Su Jingshi as the independent non-executive director of the company? Li Wei explained that because Su Jingshi has more than 30 years of management experience in franchising enterprises, he is highly respected in the industry. He joined Li Ning at this critical moment, which will further deepen the expertise of the Board of Directors in retail and consumer markets.

"The current dilemma of Li Ning cannot be solved by changing the coach, and a clearer brand strategic positioning should also be formulated." Zhang Qing, a sports marketing expert, said in an interview with our reporter.

　　 Defeat in the international market

Under the background of the news that Zhang Zhiyong left the company, it was widely reported that Li Ning Company had another disturbance in Spain. On July 9, several Spanish mainstream media reported that Li Ning's Spanish subsidiary had filed for bankruptcy. The next day, Li Ning Company issued an emergency statement saying that its headquarters had received an email notice from LN PLUS IBEROAMERICA S.L. on July 4, and it applied for bankruptcy due to the deterioration of the Spanish market environment and its own poor operation. This company is the licensor of Li Ning in Spain, not the subsidiary of Li Ning in Spain.

The statement also revealed that the Spanish licensor had signed sponsorship agreements for some clubs in its own name. Li Ning is now actively assisting the licensor to solve the remaining problems after its bankruptcy, including assisting the club it sponsored to obtain equipment. In addition, the sponsorship agreement with the Spanish national basketball team has always been directly signed by Li Ning, so the implementation of the agreement will not be affected in any way.

In connection with its entry into the international market, Li Ning's Olympic journey began with the 1992 Barcelona Olympics in Spain. In 2001, Li Ning's first overseas brand image store opened in Spain. In 2007, Li Ning signed a contract with the Spanish Olympic Committee and the Spanish basketball team to become its clothing sponsor. {page_break}

According to the previous internationalization vision of Li Ning, 2009-2013 is the first stage, mainly for the preparation of internationalization; From 2014 to 2018, it will be fully internationalized. The bankruptcy of Spanish licensors marks that Li Ning's internationalization has suffered a heavy blow. At present, its international market share accounts for less than 2% of the total sales.

"The business scale of Li Ning brand products in the Spanish market is very small, which has limited impact on the group's overall business." Li Wei admitted that the group will focus on developing the Chinese market, while the international market will explore in a risk controllable way.

According to the above-mentioned sports goods industry personage, Li Ning Company has retreated from the international market in an all-round way, and now focuses on the domestic market. The reason for the current dilemma is that Li Ning Company has been in constant civil strife, and its product positioning is also uncertain.

But Li Ning's local advantages are losing. In 2011, from the perspective of sales performance, not only did Adidas return to the second place in China, but also Anta, a latecomer, caught up, while Li Ning's performance was unsatisfactory. On the evening of June 11, Li Ning issued a performance warning announcement, which showed that compared with the same period last year, the order amount of shoes products in the fourth quarter of 2012 was expected to decline by double-digit year-on-year, and the order amount of clothing products was also expected to decline by more than 20%.

In this regard, Jin Zhenjun said that the main reason why the profitability of this year is not good is that the company hopes to solve the current problem with the current cost. In the future, the company will increase investment, and it is expected that the profitability will be improved three years later.

"At present, the whole industry is facing challenges, and Li Ning is the first local company to propose reforms," Li Wei explained.

　　 Reform and change

The house leakage happened repeatedly. In the context of a sharp decline in performance, the senior management of Li Ning Company left in recent two years.

According to incomplete statistics, in the past two years, in addition to Zhang Zhiyong, who has just left the company, Shi Wei, the chief brand official of Li Ning, Guo Jianxin, the chief operating officer, Wu Xianyong, the general manager of Lotto's business unit, Xu Maochun, the vice president and chief product officer of CPO, Zhang Xiaoyan, the director of the government and the external public affairs department, left successively. It can be said that Li Ning Company has achieved a great change in the senior management. With the resignation of Zhang Zhiyong and the participation of Jin Zhenjun and Su Jingshi, how does Li Ning Company seek change in the future? According to Li Wei, Li Ning has formulated a blueprint of "three steps" to comprehensively improve the group's performance:

The first stage (the next 6-12 months) focuses on the clearing of retail and channel inventory; Improve the production and operating cost structure; Strengthening organizational and implementation capacity; Improve channel efficiency, profitability and performance; Focus on core products in the domestic market; Strengthen brand investment and improve marketing efficiency.

In the second stage, we will improve the supply chain management of the Group, improve the product listing and planning mode, and provide more first-class products and customer experience to consolidate the leadership of Li Ning brand in China's sporting goods market.

The focus of the third stage is to focus on transforming the business model, including improving the profit structure of the company and channels; More in line with the market's requirements for products and customer brand experience; A virtuous circle of higher retail sales, retail efficiency and return on cash and investment. Li Ning said that the Board of Directors unanimously supported the new leadership team and was confident that the Group would move in the right direction and return to the track of sustainable profit growth. In addition to replacing the management, Li Ning also places its hopes on sports events. On June 11, Li Ning announced that it had signed a memorandum of cooperation to become a CBA equipment sponsor. Industry insiders believe that the amount of sponsorship is likely to be 2 billion yuan.

However, Li Ning's net profit in 2011 was only 386 million yuan. The above sports industry personage, who did not want to sign his name, told our reporter that Li Ning's move was a huge gamble. If he won the bet, he could fight a turnaround. If he lost, it would be even worse.

Li Ning also has high hopes for the upcoming London Olympic Games. Li Wei previously said in an interview with our reporter that the company expects to further strengthen the public's awareness of the Li Ning brand by taking advantage of the opportunity of the 2012 London Olympics.