Li Ning'S "Three Focuses" Strategy

From the time when the Spanish licensor applied for bankruptcy due to cash flow interruption to the time when the only branch in Hong Kong, China was closed, Li Ning's overseas market did not develop smoothly. However, from Li Ning According to the "Three Focuses" strategy recently released by the media, the overseas market has not been included in the map of priority development.

At the beginning of this month, Li Ning's store on Cameron Road, Tsimshatsui, Hong Kong, was closed Hong Kong The only branch of.

When it opened in 2009, Li Ning said that Hong Kong stores were mainly used for product testing to pave the way for brand internationalization. Zhang Zhiyong, then CEO of Li Ning, also planned that by 2018, more than 20% of Li Ning's revenue would come from overseas markets. Therefore, the closing of the Hong Kong store, to some extent, means that Li Ning has temporarily abandoned the Hong Kong market.

In this regard, Li Ning stressed to reporters that Li Ning would take proactive reform measures in the past six months, such as the "three focuses" strategy to improve the company's situation.

Li Ning's so-called "three focuses" strategy refers to focusing on the core brand Li Ning, focusing on core business and focusing on the mainland market, and focusing on the development of basketball and running markets. This adjustment will inevitably involve product line adjustment, market layout adjustment, business scope adjustment, etc. For example, the original product inventory needs to be cleaned up, and some stores need to be closed. After the inventory is cleaned up, the new strategy can guide you to go into action lightly. The premise of all this is to "focus on the development of the mainland market".

The data shows that in 2010, the overseas revenue of Li Ning accounted for 1.4% of the total revenue, while in 2011, the proportion was about 1.9%. The proportion of its overseas revenue is still small. Therefore, the loss of some markets has little impact on the overall business of the Group. But Zhang Qing, CEO of a sports consulting company, believes that it will still cause losses to the international reputation of local brands. However, in the case of blocked business development in the mainland, internationalization is not the best choice.

It is not easy for Li Ning to focus on mainland business. The macro economic environment is not yet clear, and the industry competition is extremely fierce. With the surpassing of Anta inside and the pressing of Nike and Adidas outside, the market space left for Li Ning seems unclear.

This embarrassing situation can also be seen from the financial report data.

In the first half of this year, Li Ning's net profit attributable to shareholders of listed companies was 44 million yuan, down 84.9% year on year. The overall gross profit margin decreased by 3.1 percentage points over the same period of 2011. The amount of orders in the fourth quarter of 2012, which just ended, also declined significantly. clothing On the other hand, the order amount declined by more than 20%. At the same time, the inventory situation of Li Ning in the first half of this year has not improved, and its average inventory turnover period has risen to 95 days.

Closing the store is not a sudden move. The total number of Li Ning stores has already decreased year by year compared with the peak period. In the first half of this year, Li Ning opened 248 new stores. At the same time, it evaluated the profitability of the stores and made structural adjustments. 1200 inefficient stores were closed, which accounted for up to 15%. As of June 30, there were 7303 regular stores, flagship stores, factory stores and discount stores in Li Ning, a net decrease of 952 compared with the end of last year.

However, Li Ning's self adjustment is still very correct in the eyes of many industry insiders. In fact, compared with other brands in the mainland, Li Ning's problems were exposed earlier, and the awareness was also earlier. In 2011, Li Ning announced to spend 300 million yuan to buy back inventory. At that time, Anta , Special Step, 361 degrees, etc. all claimed that there were no relevant problems.

A senior person in the sports industry analyzed to the reporter that, in addition to adjusting the market layout, the closure of sports brands is also related to the high rent in the gold business district.

For example, some media reported that Li Ning's Hong Kong store was settled in October 2009, and the monthly lease was about 450000 Hong Kong dollars at that time. Last year, when the lease expired, it was followed up for a short period, and the rent was increased to more than 700000 Hong Kong dollars. Similarly, only the first to second floors of the fifth floor of the international brand Nike's store on Nanjing West Road in Shanghai are open now, and the other floors are closed.

"The rent of gold business districts in big cities has increased significantly in recent years, while the profit space of sports brands has been shrinking, and the growth rate of profits has not kept pace with the pace of rent growth," said the above person.

Whatever the reason, it has become the consensus of the industry that the era of sports brand horse racing enclosure has ended temporarily.