The Current Situation Of Garment Industry: Lining'S Rise And Decline

After the Beijing Olympics, only four years later, there were shops, police, high-level exchange, and from high inventory, 4 years to 76% market capitalization, Goldman Sachs abandoned, declining orders, same store growth......

Almost all the miscellaneous diseases that a sports brand can meet is in front of Lining.

For a long time not appearing in public.

The last memorable appearance was at the opening ceremony of the 2008 Beijing Olympic Games, when the "flying sky" lit the torch, and the whole world was boiling.

But this time, Lining, who is about to enter the year of knowing destiny, once again returned to public view, but had to "save" a Li Ning Co with many crises in his capacity as a founder.

After the Beijing Olympics, only four years later, there were shops, police, high-level exchange, and from high inventory, 4 years to 76% market capitalization, Goldman Sachs abandoned, declining orders, same store growth......

Almost all the miscellaneous diseases that a sports brand can meet is in front of Lining.

In 2011, Lining's sales fell sharply, only 3 billion 880 million yuan was recorded in 1-6 months this year. Net profit also dropped from 1 billion 547 million yuan in 2010 to 630 million yuan in 2011.

Merrill Lynch Merrill Lynch expects Lining's annual loss to be around 226 million yuan.

Perhaps it is a unique experience of athlete career. Lining has a deep Olympic complex. Shaping a global brand from China has always been the commercial dream of Lining and Li Ning Co.

But before becoming an international brand, Li Ning Co's biggest hope is to get back to the first place in the Chinese market.

Prior to 2003, Lining maintained a leading position in China for 9 years and was surpassed by Nike and Adidas.

"Lining has been reluctant to confuse him with Li Ning Co. He likes freedom and does not want to be a corporate image.

He did not want to destroy his own business, nor did he want to destroy it.

A former Li Ning Co executive told reporters that in order to maintain this state of freedom, Lining gradually retired from the scene in 1999 and handed over the decision-making power to professional managers.

Before Chen Yihong, Zhang Zhiyong became Lining's successor since 2004.

Zhang Zhiyong is 6 years younger than Lining, and his ancestral home is Xinjiang, which is longer than Shanghai.

He worked as a cashier at the Li Ning Co to Lining, general manager of Beijing company during the 12 years of Lining culture. He must be deeply rooted in the dream of Li Ning Co internationalization.

So in the first year of CEO, Zhang Zhiyong worked out a secret plan for Li Ning Co: 15 years to surpass Nike in the Chinese market.

To this end, improving supply chain efficiency and reducing inventory turnover days became the main direction for Zhang Zhiyong to take office. In 2004, the average stock turnover days of Lining decreased by 23% compared to 2003, reaching 124 days, and in 2007 it dropped to less than 70 days.

Ms. Lin started working with Lining in 2007, and she still remembers that happy day.

"At that time, my most profitable part was group buying. Some large enterprises wanted to hold a sports meeting or hold other activities, and they would collectively purchase a group of sports for their employees.

Articles.

If you choose Nike or Adidas, you will often encounter the shortage of local stock, and the regulations of these foreign brands are very "dead". There will be goods available, but no goods will be available, but Lining will not be the same.

Ms. Lin gave an example. At that time, a company had to order a thousand person size Jersey, and it was urgent that Nike could not do it, but the Li Ning Co said it could.

Even if there is not enough goods in Guangzhou, they will try to pfer goods from all over the country.

Zhang Zhiyong has also been expanding the market share of Lining in the short term by increasing the number of franchises.

One of Lining's distributors told reporters that in 2004, there were 2272 franchised stores in Lining, but 5935 in 2008. The proportion of franchised stores in the group's total revenue increased from 75% in 2004 to 82.2% in 2008.

From the perspective of financial data, the strategy of extending the market share in the form of extended expansion has been an unprecedented success in China's rapid economic development in 2004 and 2008.

In 2004, Lining earned 1 billion 878 million yuan and reached 6 billion 690 million yuan in 2008.

This can be a symbolic gesture for Chinese sports brands to catch up with the international footsteps, but after 2008, this mode brought Lining a real nightmare.

International crossroads

Though Lining is fading out of the company's specific business, he is still the soul of Li Ning Co. His behavior and influence once again dominate the company's fate.

In 2008, the Olympic Games were held in Beijing. Although the sponsorship amount did not rival Adidas and lost the qualification of the official sponsor of the Beijing Olympic Games, Lining ran the torch in the air and ignited the Olympic torch. It seemed to broadcast an unprecedented advertisement in front of billions of viewers around the world.

Although a promotion may not make an international brand, Lining, a middle-level journalist who once worked in the brand Department of Beijing, told reporters that China's sports brand will not encounter such an international historical opportunity at least 10 or 20 years after the Olympic Games.

Next, Lining's series of measures are all around 2008.

This year,

Lining has found an international shortcut to participate in the Olympic Games in Beijing.

In addition to China's gymnastics, diving, table tennis, shooting team and other long-term sponsor status, Lining also quickly signed the Spanish and Argentina men's basketball team.

Before and after the Beijing Olympic Games, there was a popular saying in the market: "China wears NIKE, Spain wears Lining".

Then in August 2009, Zhang Zhiyong told a forum in Peking University Guanghua School of management: "Lining has stepped out of the first step of internationalization, and the ultimate goal is to become a global brand."

Lining's strategic plan clearly stated: in 2013~2018 years, Li Ning Co's goal is to become the world's top 5 Sports Brand Company.

In fact, just one month before Zhang Zhiyong's speech, the two floor of the IONOrchard shopping center on the most prosperous Orchard Road in Singapore is a shop with half a badminton racket on the entrance to the elevator, and a large LCD TV plays the badminton equipment in the process of making and using it.

This is the first badminton flagship store opened by Lining in Singapore.

4 months later, the first Lining badminton product store in Hongkong, Tsim Sha Tsui, was also opened.

There are three types of channels for Lining to embark on the international market: one is the European "authorized business" represented by Spain; the other is the Southeast Asian self dominated category store represented by Hongkong and Singapore; the three is the acquisition of foreign e-commerce companies, and the online mode of product development and sale by the United States of America (two).

Independent commentator Ma Gang said.

However, in Ma Gang's view, although internationalization is the inevitable trend of the development of domestic sports brands, the timing of Lining's choice is not appropriate.

More frankly, this is a mistake made by Lining's management team, especially in Zhang Zhiyong's decision making.

Inventory crisis under rapid expansion

Or from 2008, this year, Lining's 146 dealers under Zhang Zhiyong's command, the pace of expansion has been accelerating, the number of new stores has increased to 1012, creating a new record.

Driven by this, Adidas, the official sponsor of the Olympic Games, has not only won the championship in the Chinese market like it had vowed before, but was surpassed by Lining.

After the Olympic market unexpectedly fell, Adidas and Nike were tied up by huge stocks, while the local brands headed by Lining advanced rapidly, and showed strong performance in the financial reports.

People expect that the new era of Chinese sports brand has arrived, but this is not the case.

"The sale of Beijing Olympic Games is not ideal, many distributors in 2009 have serious inventory problems."

Lining, a distributor of the Lining store in the Northeast market, revealed.

But in 2009, Lining's earnings report showed that the stock was only 630 million yuan in that year, with an average turnover of 53 days.

People familiar with Lining told reporters that these financial data are only theoretical figures, many of which are still in the hands of distributors and distributors, and have not been digested.

Before 2008, China's sports brand industry reached a compound growth rate of 30% over the past 5 years, but the market growth rate dropped to 11% in 2009.

The consumer market has cooled rapidly after the Beijing Olympics, and the number of stocks has snowball.

But this trend is obscured by Lining's international prosperity and theoretical data in his earnings report.

Until 2010, this financial skill was completely exposed by the dealer's resistance.

In 2009, Li Ning Co added 1004 new stores, of which 80% were located in two or three tier cities, but the same store sales growth dropped from - 25.8% in 2008 to - 2.3%.

Affected by this, the amount of orders that had been rising at a rate of 20% to 30% suddenly fell to 7%-8%, and this downward trend continued until 2012. In the fourth quarter of this year, the total amount of orders for Lining continued to decline in double digits.

In the two days of -21 December 20, 2010, Li Ning Co's stock price plunged more than 20%, and its market value evaporated more than HK $4 billion 500 million.

Thinking about the day when a car garage was taken away, Ms. Lin, who was once a Lining dealer, felt relieved two years later.

"Thousands of pieces

Thousands of pairs

Son, T-shirt is 10 yuan, like trash, cleaned up by people who are specially charged with stock clothing.

She told the Nandu reporters that the Asian Games had to take back the venues and her shop had to close.

She could have found other stores to continue her business, but she really had no confidence and finally gave up.

In 2011, in order to solve the problem of high inventory, Lining bought 300 million yuan inventory from dealers and digested inventory through increasing factory stores and discount stores.

But the results showed that Lining's inventory in the first half of this year has increased to more than 1 billion 138 million yuan last year.

"90" brand failure

Also in 2008, the inventory pressure generated by the Olympic Games has not attracted the attention of Li Ning Co. In the industry view, Zhang Zhiyong is to blame.

A former Lining employee told reporters that at that time Zhang Zhiyong's energy was mainly in the Li Ning Co internationalization and replacement projects.

Li Ning Co started the project in May 2008, and Lining, the founder, participated in all the proposals.

Although Lining was hesitant about the adjustment, he finally decided to give Zhang Zhiyong's team three years.

After many modifications, the final plan was officially announced on June 30, 2010 - the Li Ning Co's 20 birthday celebration.

"Lining cross action" brand new L Ogo unveiled, the new brand slogan "m akethechange" replaced the original "anything is possible".

In order to publicize the new logo concept and sports brand pformation from the past overreliance on shop expansion mode to improve the efficiency of the existing store pformation, Lining even accompanied Zhang Zhiyong on a two CCTV dialogue program.

The new strategy further clarified the Li Ning Co's attempt to build an international brand, but this change made Zhang Zhiyong fall into the biggest crisis in his career.

The most skepticism comes from the audience positioning after 90, followed by the price difference with Nike 10%.

In the second half of 2010, the US dollar weakened rapidly, and the depreciation rate of other currencies was much higher than that of the yuan. The appreciation of RMB against the US dollar reached 3.9%.

Influenced by exchange rate fluctuations, Nike and other international sports brand prices have been sharply explored in China.

Dou Huaishan, a senior member of Guangdong channel field, believes that the price overlap between Nike, Nike and Adidas, which originally tried to compete with the international brands, has increased to 10%.

The market reaction also shows that the adjustment is not successful.

Li Wei (a pseudonym) is a distributor in Guangzhou with a number of Lining franchised retail outlets.

At that time, Lining raised the price of the product to the level similar to that of Nike and Adidas. At the beginning, because of the rise in unit price, the profits were obviously improved, and they thought they were not bad, so they also accelerated the opening of the store.

But slowly found that single store sales continued to decline, inventory backlog, Cantonese said "wet head", they want to retreat again is very difficult.

"Now Lining group is saying that it is just losing money quickly, but I am losing money."

What is even more ridiculous is that before changing the bid, it was a conservative secret. Lining completed the order meeting before issuing the new LO G O, which means that all the old orders in the supplier's hands were born in stock.

For Lining, who was originally a high inventories, this is undoubtedly worse.

In 2011, Lining's sales fell sharply, only 3 billion 880 million yuan was recorded in 1-6 months this year. Net profit also dropped from 1 billion 547 million yuan in 2010 to 630 million yuan in 2011.

Merrill Lynch Merrill Lynch expects Lining's annual loss to be around 226 million yuan.

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The old prince goes to the mountain to save the field.

The Li Ning Co has paid a painful price for the internationalization decision.

Recently, Lining, the only branch in Hongkong, came again to close the news.

Prior to July, Lining group's authorized dealer in Spain has declared bankruptcy.

A Lining resignation executive told Nandu that Lining had lost half of his employees at the design center in Portland, the United States.

And the US partner F o o tLockerInc.

The agreement has been terminated.

Lining's internationalization has become a mirage.

However, Lining should reflect on what the company has done in the past two years in the past stage.

In the three areas that it will focus on in the future: the main brand "Lining card", the core sporting goods business and China's domestic market, Lining's internationalization strategy has been shelved for the time being.

This is perhaps the most painful and darkest period since the Li Ning Co was founded.

"From the bottom of my heart, I never had great interest in doing business.

The first thing to do is this brand, it's a business.

When the enterprise endangers the development of the business, I may be more involved, otherwise, only business things, I am not very interested. "

A previous interview with Lining may see that Lining won't take CEO's first line of duty even if it comes back.

"In the past, now and in the future, I will pay for the Lining brand, and will always be the major shareholder of the company."

At noon on July 5th, Lining first appeared at the press conference in 5 years.

At 6 a.m. that day, the Li Ning Co just announced the announcement of the management reorganization, announcing that Zhang Zhiyong was retiring as chief executive officer and no longer a member of the Executive Committee of the board of directors.

The Li Ning Co business is temporarily taken over by the founder, executive chairman and executive director Lining, executive vice chairman and executive director Jin Zhenjun.

In the division of roles, Jin Zhenjun is responsible for the development and operation of internal affairs, while Lining himself focuses on managing external affairs and relations, and in the future, "playing a more important role and putting more energy into it".

At the same time, Lining's annual salary is adjusted to 3 million 700 thousand yuan and other benefits.

Jin Zhenjun is from T PG, the latter is a strategic investment partner of Lining. In January this year, when he subscribed to Lining convertible bonds again, the shareholding increased to 12.1%.

For the Korean Americans of the same age as Lining, the market is no stranger.

He had been famous for his investment and pformation in Daphne in the retail field.

About Kim Jin Jun's "joining", a representative of a multinational advisory body who had consulted for the Li Ning Co told Nandu reporters that it was absolutely consensual.

"On the one hand, T P G is unable to sit still. On the other hand, Lining, a major shareholder, does not have a plan of" covering the sky "by himself. This is also the consistent style of Lining, a gymnast prince.

After Jin Zhenjun entered Lining, he had completed the task of reducing inventory in 6-12 months.

He advocated that we should speed up the turnover speed to get closer to the market, optimize the supply chain process and optimize the process of product development.

In the first half of this year, Lining closed 1200 inefficient stores and its dealers were reduced to 52.

Whether T PG holdings or Lining's comeback were recognized by the capital market, the two rise of Lining's share price rose by 21% and 7.25% respectively.

But even so, the industry still has reservations. "Compared with Daphne, Lining's plate is bigger, the mire is deeper, and the pformation is more expensive."

Lining's rise and decline

2003

Lining has been in the lead for 9 years in China and has been surpassed by Nike and Adidas.

2004

Zhang Zhiyong, 36, served as Li Ning Co Ltd C EO.

June 2004

Li Ning Co is listed on the stock exchange of Hongkong.

August 2008

Lining, the gymnast prince, ignited the Olympic torch as the torch bearer of the Beijing Olympic Games.

2009

He proposed an international strategy and opened a Lining badminton product store in Singapore and Hongkong.

Lining once again surpassed Adidas, ranking second in the Chinese market.

May 2010

The order of new products dropped sharply, the stock crisis broke out, and the market value of the stock fell by 4 billion 500 million yuan.

June 2010

Li Ning Co officially announced the replacement of new logo and brand slogan.

It is proposed that 2009 - 2013 is the preparatory stage for internationalization, and that -2018 will be a comprehensive internationalization stage in 2014.

2011

In order to enhance the efficiency of channel distributors, the total number of low efficiency distributors was reduced from 90 to 57.

January 2012

Li Ning Co announced that two investors T PG and G IC subscribed to convertible bonds issued by Lining group.

Among them, TPG subscribed for 561 million yuan, and GIC subscribed for 189 million yuan.

July 2012

The Li Ning Co announced that Zhang Zhiyong had resigned as chief executive and no longer served as executive committee member of the board.

The company's business was temporarily taken over by the founder, executive chairman and executive director Lining, executive vice president and executive director Kim Chun king.

August 2012

Li Ning Co released the surplus police, the US bank Merrill Lynch estimated that the annual loss will be around 226 million yuan.