Lining Listed For The First Time In 8 Years, The First Big Loss, 2012 Is The Bottom Of The Valley Is Also The Starting Point.

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< p style= "text-align: center >" insiders believe that Lining's inventory is a "zero" for the company. The company will relieve the high inventory pressure < /p >

< p > 2012, Li Ning Co experienced a setback. First, top executives of the company and their brand positioning were questioned, and the company's share price plummeted due to a substantial loss in the whole year. Li Ning Co in 2012 can be said to be at the top of the storm.

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< p > for Li Ning Co's early losses, the Li Ning Co said in a reply to reporters, mainly due to the one-time cost involved in the change plan, including the channel revival plan.

The channel recovery plan requires a one-time budget support of RMB 1 billion 400 million -18 billion, which will involve accounting for inventory and bad debts and provision.

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< p > some analysts have affirmed the above plan of Li Ning Co and told the reporter: "Lining is wise to make preparations for < a target=" _blank "href=" http://www.91se91.com/ ">" clothing /a > stock preparation ". After taking inventory of bad debts, Lining can reduce risks and help enterprises to make accurate assessment of book value, so as to work out a more suitable strategy for company development.

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< p > Li Ning Co told reporters that 2012 is the bottom of the industry and the starting point for the revitalization of the company.

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< p > strong > expansion is not suitable for Industry Development < /strong > < /p >

< p > December 17, 2012, the Li Ning Co released the announcement that it expected to make a big loss in 2012. This is the first time that a href= "http://sjfzxm.com/news/index_f.asp" > Lining < /a > has been expected to make a big loss in 8 years since its listing in June 2004.

The board of directors explained why the loss was caused by the implementation of the channel revival plan.

According to the announcement, the board of directors of the above channel revival plan has approved the full implementation and is expected to invest 1 billion 400 million to 1 billion 800 million yuan.

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< p > a person familiar with the matter said that the Li Ning Co's bad debts were mainly aimed at < a href= "http://sjfzxm.com/news/index_s.asp" > clothing inventory < /a >, hoping to solve it once and for all.

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< p > it is understood that the main factor of Li Ning Co's high inventory comes from the overestimation of the consumer market after the 2008 Olympic Games.

After Li Ning Co's expansion, it has tasted the bitter fruit of closing stores and clearing stock.

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< p > Li Ning Co's board of directors also pointed out the impact of rapid expansion on the company in the announcement. It said that the group had previously expanded its marketing network in China's sporting goods industry and seized market share through wholesale operation.

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< p > data show that between 2004 and 2008, Lining's stores increased from 2272 to 5935, and the income increased from 1 billion 878 million yuan to 6 billion 690 million yuan.

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< p > Li Ning Co told reporters: "over the past decade, the company has rapidly expanded its marketing network through wholesale operation, occupied market share and seized the first round of development opportunities.

However, in recent years, the growth rate of the whole industry has been declining rapidly and showing signs of saturation. The past development mode is no longer suitable for the future requirements of the industry.

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Xiong Xiaokun, a light industry researcher at CIC, pointed out to reporters that Lining had multiple problems in the process of entity store management and channel development. He only paid attention to the speed, scale and quantity of expansion, which greatly reduced the core competitiveness of the company, and its market acceptance was severely affected by P.

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< p > < strong > performance declined year by year < /strong > < /p >

< p > insiders estimate that Lining overestimated the 2008 Olympic sales growth and led the company to remain optimistic about sales in the following years.

However, in fact, it has entered the end of the gold sales growth period since 2008.

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< p > from 2009 to 2010, Li Ning Co realized profit of 1 billion 342 million yuan and 1 billion 547 million yuan respectively, and dropped to 631 million yuan in 2011, far lower than 960 million yuan in 2008.

By the first half of 2012, the company's operating profit was only 184 million.

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< p > some analysts pointed out that the early growth of Lining was due to the upgrading of residents' consumption level and the gradual pformation of lifestyle into leisure, which gave a lot of marketing space for sporting goods.

In fact, consumers buy sports goods not only for sports, but for leisure life.

After 2010, the trend of consumer consumption is changing. Some of them tend to be more professional, some of them are looking for more fashionable, more casual and more typed products. This makes unified sporting goods brands face competitive pressure as a whole.

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< p > in fact, Li Ning Co has changed its management strategy after its bottleneck in wholesale operation.

"From the perspective of the development of the industry, the retail oriented business model is inevitable.

In addition, our pilot projects in the past few months have gained gratifying results, so we have also confirmed our strategic choice. "

Li Ning Co said so.

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< p > < strong > once, "zero" > /strong > /p >

< p > Li Ning Co board of directors pointed out in the announcement that "excessive expansion leads to the increase of dealer inventory, which has a negative impact on retail store's performance and profitability, and leads to continuous deterioration of their cash flow and financial situation".

In order to clear up inventory, the Li Ning Co Board approved the full implementation of the channel revival plan.

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< p > according to Li Ning Co's change plan, its future strategic adjustment can be divided into three stages: the first stage is the next 6-12 months, the main concern is retail and channel inventory clearance; the second stage is to improve group supply chain management, improve product listing and planning mode; and the third stage focuses on pforming business models, including improving the profit structure of channels.

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< p > Li Ning Co told reporters that the fundamental purpose of promoting the change plan is to enhance the financial performance of the group and make Li Ning Co's long-term profits sustainable growth.

Since the announcement of the reform plan in July last year, the group has made good progress in a series of initiatives, including strengthening investment in brand and product, improving group supply chain and retail business, and streamlining the cost structure.

In addition, in the past few months, the management of the group has successfully introduced new talents.

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< p > channel recovery plan needs a one-time budget support of RMB 14-18 billion, which will involve accounting inventory and bad debt provision and provision.

This plan has won the praise of Xiong Xiaokun: "this time, Lining's inventory is a" zero "for the company. The company can extricate itself from the pressure of high inventory, and then start the next battle with a positive attitude.

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< p > however, there are also doubts about whether a 1 billion 400 million -18 billion yuan can be used to clear Lining's inventory and whether Lining has more stocks. < /p >

In addition to P, Li Ning Co has replied to reporters through the channel revival plan. The company supports dealers to clean up inventory, buy back, reduce debt, rationalize sales network, and restructure receivables for each participating dealer through targeted rehabilitation plans.

At the same time, the company also reformed channel marketing policy to support dealers to strengthen retail capacity.

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< p > but there are reports that Li Ning Co's support for distributors is not the same.

There are more rumors that Hunan dealers will get 4-5 discount on stock repurchase, and the rumor has not responded.

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< p > at present, the success of the channel revival plan remains to be tested by time, and what Li Ning Co pays more attention to is the future development.

"We hope that 2012 will be the bottom of this industry and the starting point for the revitalization of the company.

Although there are many unforeseen factors in the macro environment and the market, it is foreseeable that the whole management team of Li Ning Co will have full devotion, professionalism and strong execution in the coming years.

Li Ning Co said.

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