Jordan Sports Value Is Greatly Discounted. Inventory Is High.

Today, the lawsuit is still progresses, and it is still inconclusive whether whoever wins or loses. But in the industry with the best prospects and the most vigorous development of enterprises, Jordan sports, which has not yet received approval, has experienced a sharp decline in profitability after a cold spell that swept through the Chinese sporting goods industry in the second half of 2011. In order to win the market, Jordan sports has done a lot of small profits, such as inflated profits and less value reduction, but in nearly two years, almost all the domestic sports apparel enterprises have lost their performance or a sharp decline in their performance.

　　 The hidden value of brand value is not included in intangible assets.

stay Jordan Sports In the introduction of Jordan's sports competitive advantage, the first competitive advantage is the brand it competes with NBA star Jordan. Jordan sports high profile claims that "brand is the core and most valuable intangible asset of the company", and "our company has been building the Chinese national sports brand for many years, focusing on the positioning, value and personality of Jordan brand, and integrating the struggle and transcendence spirit of sports competition into the management culture of the company". Obviously, the "Jordan sports" brand as an intangible asset occupies an important position in the assets of Jordan sports.

However, Jordan sports did not include the intangible assets of the brand into the intangible assets that can be accounted for. According to the detailed information of the 259 pages of the prospectus (Declaration), intangible assets of the year ended June 30, 2011, Jordan sports intangible assets constituted "land use rights" and "software". The total book value was 65 million 921 thousand yuan, which did not include the "core, the most valuable" intangible assets claimed by Jordan sports brand.

Brand is the mark of manufacturer plus goods. After the trademark is registered, a trademark is formed. The enterprise is protected by the law and has its exclusive right, and the trademark becomes the entity manifestation of the brand. In the history of Jordan's sports development, the "Jordan" brand is an important factor for Jordan's early survival, medium term development and subsequent large-scale expansion. Therefore, in the composition of intangible assets, Jordan sports should not allow the 136 registered trademarks to be absent. However, why does Jordan sports do not include the brand names of these 136 Trademarks into intangible assets? There are accountants who said: "if a trademark has a useful life, it should be amortized in accordance with its useful life. If the trademark has no useful life, it should be tested at the end of each year".

Judging from the company's operation in the past, the brand value of the 136 trademark representatives owned by Jordan sports will undoubtedly become an intangible asset of high value. This is also the important reason why Jordan sports and NBA star Jordan compete for Jordan brand. But there are positive and negative sides in everything. The other aspect of Jordan's brand as the intangible asset of high value is that the huge amortization will bring some harm to Jordan's sports profits. So, the value of the "Jordan" brand is not included in the intangible assets, which really adds a lot of profits to Jordan sports.

At the same time, at the same time, the two lawsuits between Jordan and the flying man, Jordan, still have no final conclusion from the current news. In fact, winning or losing is good. The brand "Jordan", which originally misled consumers and misunderstood Jordan, has lost its inner sanctity. The loss of such divinity will probably lead to obvious changes in the original consumer groups. Consumers who simply chase "Jordan" will be reduced, while the brand value of "Jordan" in Jordan sports will also be greatly reduced. If the "Jordan sports" brand is really included in the intangible assets, it will be a great asset impairment.

　　 Accounts receivable remain high, distribution mode prevails on credit.

In the course of Jordan's sports development, apart from "Jordan" brand as an important reason for its early survival, medium-term development and large-scale expansion, dealer mode is also an indispensable factor. However, the mature dealer mode in China has distorted Jordan sports.

There are two forms of Jordan sports sales: Direct stores and distributors, among which dealers are the main selling modes. The prospectus (Draft) shows that "during the reporting period, the company's main revenue comes from products sold to authorized dealers, which is mainly sold by distributors through their own or authorized stores to terminal consumers". For dealers, Jordan sports products sales use futures mode sales, that is, "dealers to Jordan sports order, and pay 20% of the order amount as a deposit, and then Jordan sports delivery products, get the final payment."

Under the distributor mode, the dealer directly purchases from the production enterprise, and then sells the stock to gain the interest rate. The biggest advantage of the dealer mode is that the business is not selling credit to the dealer, but actually receives the money, which effectively guarantees the cash flow. Therefore, under the distributor mode, the accounts receivable level of enterprises is relatively low, and the cash flow is excellent. However, according to the operation of Jordan sports, its accounts receivable increased year by year. By the first half of 2011, Jordan's sports accounts receivable reached 24.65% of the total assets, accounting for 34.25% of its operating income.

In accounting subjects, accounts receivable are operating receivable subjects, and their natural characteristics make the subject a serious financial fraudulent and inflated profit. The so-called accounts receivable refers to the accounts receivable business receivables, which should be collected from the purchasing units for sale of goods, materials, labor services, etc., as well as the non acceptance of the payment due to the incidental expenses and the maturity of the account. The generation of accounts receivable means that there is no cash inflow in the main business income of enterprises, but the right of collection. Before the accounts receivable are recovered, the so-called profit realized by the enterprise is only the book profit. It is the concept of numbers, not the actual profits. Therefore, accounts receivable are easy to be manipulated. Due to this characteristic, accounts receivable are often used by illegal enterprises to manipulate profits.

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If a company's accounts receivable are abnormal, then the company's finances should be worthy of investors' attention. Corresponding to the current situation of Jordan's sports, there are two possible reasons for the sudden increase in Jordan's accounts receivable. One is that Jordan's sports make great profits to make the performance appear better. The risk of doing this is that the bubble that has been inflated after the listing is broken, the net income of the revenue has slowed down, and the second is the bulk credit of the dealers. But in this case, it is obvious that Jordan sports is giving up the advantages of its own business mode, giving up the initiative in the operation, and the pricing power of Jordan's sports will be challenged. The reduction of the price will inevitably bring about a profit dilution and will eventually fall into the decline of net profit. No matter what the reason is, it is not good news for investors.

　 Family fight for dealers related transactions become normal

Through in-depth research, the reporter found the possible cause of the distortion of the dealer mode in Jordan sports. There are many affiliated enterprises in Jordan sports distributors.

Jordan sports prospectus (Declaration) shows that in 2011, Jordan sports carried out a wide range of dealer integration. After completing the sales contract in the first half of 2011, many distributors handed over the locally owned channels and businesses to Jordan sports, and incorporated their original distribution channels, business and personnel into the newly formed subsidiary of Jordan sports.

It is abnormal to cooperate with Jordan in sports. Ask, which dealer will give up the channels and familiar businesses that he has worked so hard to get rid of? Jordan sports prospectus (Declaration) shows that the integrated dealers, Wuhan Yuan Xiang, Shanghai Bai Yi, Ningxia Baisheng, Guiyang United crown, Shijiazhuang Lele Gao and Chengdu Ding Bo are all Jordan sports related enterprises, are established by the actual controller family members. From 2008 to 2010, the sales volume of the 6 related distributors accounted for 9.34%, 11.26%, 8.08% of Jordan's sports business income, and as of June 2011, Jordan sports had 53 dealers.

A professional dealer familiar with the dealer mode told reporters: "under the general dealer mode, dealers are cash in cash, dealers are at a disadvantage, manufacturers are located in the upper reaches of the channel, have pricing power and have natural advantages", but Jordan sports salesmen control the actual controller family. In the game with Jordan sports, Jordan sports lost its natural advantages. The reason why Jordan's high level of accounts receivable of sports is whether this part of the dealers purchase goods on account of credit? Or is this part of the dealer in order to smooth the listing of Jordan sports with the increase of income? No matter what kind of it is, it is not difficult to deal with the relationship between Jordan sports and these distributors. Either way, it will also hurt Jordan sports investors.

　　 Sports Garment industry Cold storage level is high

During the time of Jordan sports waiting for IPO, the textile industry encountered a bleak market situation. The domestic sports clothing brand was struggling, and high inventory became an insurmountable challenge.

According to data statistics, taking Lining, Anta, PEAK, China trends, XTEP and 361 degree six major domestic sports brands as an example, in 2011, the total inventory of six major domestic sports brands totaled 3 billion 699 million yuan; in 2012, the total inventory of six major domestic sports brands amounted to 3 billion 324 million yuan; in the first half of 2013, the stock pressure of each brand did not decrease, and six of the total domestic sports brand inventory amounted to 3 billion 29 million yuan.

Under such a high inventory pressure, can the inventory pressure of Jordan sports be reduced? According to the data released by Jordan sports, the inventory situation of the company is not optimistic. The prospectus statistics show that by the end of 2008, by June 2011, Jordan's sports stock was divided into 512 million 464 thousand and 800 yuan, 380 million 204 thousand and 200 yuan, 281 million 930 thousand and 100 yuan and 364 million 480 thousand yuan, accounting for 29.23%, 20.66%, 25.28% and 49.43% of current assets respectively.

　　 High inventory Bringing high pressure makes the garment industry difficult to manage. In 2012, Li Ning Co reported a loss of nearly 2 billion yuan, a year-on-year decline of 612.98% in net profit, a 24.55% decline in operating revenue, a 21.47% decrease in net profit in the same period last year, a 14.21% decrease in operating income, a 60.06% decrease in net profit for PEAK, 37.49% decrease in operating income, a 16.18% decrease in net profit for XTEP, a 0.09% increase in operating income and a decrease in net profit of 331% in 2012, and a decrease in operating income. Although China's net profit increased by 72.93% to 177 million yuan, its sales fell 35.18% compared with the same period last year, and the whole garment industry was bleak.

In order to digest high inventory, clothing brands have been discounted and closed in the second half of 2012. According to relevant media statistics, Lining, Anta, PEAK, China trends, XTEP, 361 degrees and other six major domestic sports brands, shutting down stores in 2012 nearly 5000; only a Lining company, shops from 8255 in 2011 to 6434 in 2012, closed 1821. In the first half of 2013, the number of closed doors of the six major domestic sports brands amounted to 2249, with an average of 12 outlets per day. Against this background, Jordan sports can not be wet?

In the extremely sensitive sports apparel industry, the inventory is on the rise. Undoubtedly, it will increase the pressure of Jordan's sports losses. For the company's performance, it will be a huge land mine. Once Jordan's sports is approved, it will further increase its inventory pressure once it is put into production, and if it can operate in a bleak setting in the same industry, can it continue to maintain its profit growth?