Sports Goods Industry In The Middle Of Winter Lining Net Profit Fell 80%

Recently, the sports Brand Company China Daily released most of the company's performance decline, of which Lining net profit fell by 85% only 44 million yuan, the resolution does not pay for the 6 months ended June 30, 2012 interim dividend.

However, for the decline in performance,

We have already realized that we have begun to change and adjust in terms of channels, personnel and so on.

The crossroads of the industry

In August 23rd, Li Ning Co announced its interim results. Its first half operating income decreased by 9.5% to 3 billion 880 million yuan compared with the previous year, and its net profit dropped by 85% to only 44 million yuan.

At the same time, Lining announced that under the current business environment, the board of directors held that cash should be retained for future development of the group. Therefore, the resolution does not pay the interim dividend for the 6 months ended June 30, 2012.

In August 29th, the Li Ning Co told the China Economic Times reporters that the growth rate of China's sporting goods industry has slowed down to the number of units in the first half of 2012. The pressure of the retail terminal to inventory is bigger, and the industry competition is more intense. With the growth of residents' income and the gradual maturity of consumption concept, consumers' demand for brand and product value has improved significantly.

In the short term, China's sporting goods industry does face some competition and domestic competition.

The industry generally adopts the product wholesale mode, which leads to problems such as excessive development, excessive channel inventory and rising cost.

"Over the past few years, the problem of homogenization of sports brands in China has been serious, and the rapid expansion of channels has resulted in excess of terminal products, showing excessive inventory, which has led to a decline in overall performance."

CEO, Zhang Qing, a key sports consultancy in Beijing, told the China Economic Times reporter that this is the result of the "big business". At the same time, it has a certain relationship with the macroeconomic downturn in China, and the channel business has become more cautious.

Independent brand commentator Ma Gang told reporters that the sports brand has entered a period of adjustment after the rapid development period. The market has begun to mature, the scale is bigger and bigger, and the development speed is reduced.

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"I think the bottom and the warmer of the industry depend on the effect of going to the stock, and the whole industry is at the stage of the crossroads.

There will be changes in the industry. Some enterprises believe that the road of sports goods is not easy to go, will turn to fashion or leisure; some enterprises will turn from the two or three line city market to the four line urban and rural market, and move to more subdivided fields; some enterprises themselves can not improve their operation conditions, and competitors will be eliminated in the end.

Ma Gang believes that the adjustment period of sports goods industry will take at least 3 years, and may change after next year.

Lining responsible person also told our reporter, as Li Ning Co has emphasized over the past year, how fast the Chinese sporting goods industry is going through a pformation period depends on the strategy and execution of each brand and their partners.

Let change happen

Compared with the performance of other enterprises, Lining's performance took the lead in a more obvious decline.

Lining's income dropped 5.8% to 8 billion 930 million yuan in 2011.

Net profit fell 65.2% to 390 million yuan compared with the same period last year.

Zhang Qing told reporters that Lining, as the benchmark of the industry, had been squeezed by domestic and international brands. At the same time, he took the lead in carrying out the reform. When the reform took place, the internal staff appeared to change, which took the lead in revealing problems in the industry.

But reform itself is no problem, but at that time Lining's strategy and tactics had problems.

Ma Gang said that Lining had many imitators before, which aggravated the market competition. At that time, Lining was not precise enough to grasp the market, and his own brand remolding was not successful enough.

Li Ning Co brand slogan changed from "everything is possible" to "let change happen". This year, Li Ning Co did start to make changes happen from its own beginning, and personnel and channels have changed.

In terms of personnel, after introducing private placement fund TPG, Lining himself began to return to the company's business. Meanwhile, the former CEO Zhang Zhiyong resigned.

At the August 23rd performance note, Lining announced a list of some new executives, including a senior executive in charge of supply chain and procurement. It was introduced from a high-tech company. A new chief sales officer and chief product officer came from the top sports Brand Company; in addition, there will be a world-class company.

Join.

But Lining's CEO is still vacant.

In terms of channel, in the first half of this year, Lining made a structural adjustment to the shops and closed 1200 inefficient stores. As of June 30, 2012, the number of shops in Lining regular stores, flagship stores, factory stores and discount stores was 7303, which was 952 less than that in December 31, 2011.

By the end of June this year, there were 52 dealers in Lining, 5 fewer than in December 31, 2011.

In terms of supply chain, Lining began running Lining logistics center in Jingmen, Hubei in April this year.

At the same time, Lining explored overseas sourcing and developed new supplier resources in Southeast Asia.

In terms of marketing mode, the above Lining chief told reporters that in the short term, China's sporting goods industry does face some competition, and because the domestic clothing industry generally adopts the product wholesale mode, which leads to rapid development, high channel inventory and high cost. Therefore, it is necessary to pform the traditional wholesale mode.

The person in charge said that dealers had a larger say in wholesale sales, but in fact, they had different purchasing power.

According to the market judgement, sales trend and storefront situation, Li Ning Co will

What products should be recommended in the store?

This restructuring is underway, with emphasis on replenishment and supply arrangements.

"In the next two years, Li Ning Co will carry out more mid-term pformation, including supply chain, commodity mode and so on.

We need to change the wholesale mode of our company and become more retail.

In the next 2 to 4 years, we need to improve our existing business models to become more retail oriented and ultimately user oriented.

"Lining has been wobble in brands and products before. The future change must be accepted by consumers, and the confidence of dealers should be established."

Zhang Qing told reporters.

Ma Gang believes that Lining's reform measures are relatively pertinent. However, Lining has a problem that can not be ignored, that is, Lining's management team is not perfect.

Ma Gang stressed that no perfect team management and implementation of change, and then a perfect change plan is useless.