Lining Strategy Adjustment, Two Years Change Twice Handsome, Can Turn The Tide?

Two years to replace the handsome, discount stock raising, can Lining turn the tide?

It has been more than a month since Jin Zhenjun was "left behind" by the industry in November 14th last year as "three armed and six armed" by Lining.

Although some media reports said that there will be new foreign CEO to take office, so far, there is no news about the latest developments.

And on the 17 day of last month, 5 days after a short suspension, Lining, the head of the Lining group, finally began to exert power: plans to raise funds for the discount share issue to supplement the company's next stage of development.

Li Ning Co, which is suffering from a sharp fall in profits and pformation, can play a "killer trick" out of the "cold winter" period? From November to December last year, Mr. Lining, who visited the stores in 6 provinces in a short month, could turn the tide again?

Insiders told reporters that Lining was once again "coming out of the mountain". This time the tide of competition is the market, and his opponent is not only "other rivals on the tide, but also a lot of historical problems left over by" Lining "for a long time.

Lining again "out of the mountain"

In 2008 Beijing Olympic Games, Lining held the torch to catch up with the sun.

However, in recent years, it has been catching up with others.

Lining, a local sports brand targeted at Nike, has been in deep mire of loss.

Three days after Jin Zhenjun left office in November 17th last year, the Li Ning Co announced that the duties of chief executive were fulfilled by Lining himself, and the executive vice chairman and executive director of Jin Zhenjun remained in office. He will continue to provide guidance and support during the pition period, while fulfilling his other duties as partner of TPG.

Li Ning Co stressed that the above pitional arrangement will be concluded after the new chief executive takes office.

"I will deeply intervene in the daily management of the company in the pitional period, work side by side with the management team of the company, and deepen the reform strategy.

In the meantime, Mr. Kim will continue to provide guidance and support. "

Lining said publicly at the time.

Lining also said that under the leadership of Jin Zhenjun, the company has strengthened the establishment of professional teams in key functional departments and established the brand vision of long-term sustainable development. The company has passed the first stage of the reform plan, laying a solid foundation for achieving the industry's leading direct retail platform.

But behind the high rating is the fact that Lining's brand is losing money repeatedly.

Annual report data show that in 2012, Lining lost nearly 2 billion yuan, lost 392 million yuan in 2013, and lost 586 million yuan in the first half of 2014. By the end of the year, the amount of loss will increase.

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Two years in two shifts

Jin Zhenjun's gloomy exit may be the result that Kim Chun Jun had never thought of when he took the baton of reform in the hands of Lining CEO Zhang Zhiyong two years ago.

Previously, he had successfully led Daphne out of the mire.

Before Jin Zhenjun entered Li Ning Co, Li Ningzheng was faced with a major crisis in performance. His orders fell and shares fell sharply. Zhang Zhiyong served as chief executive of Zhang Zhiyong for 20 years.

In July 2012, Jin Zhenjun led many executives to take over the Li Ning Co in TPG and to rescue the crumbling company with Mr. Lining. He hoped to use his experience and judgment to bring new miracles to the once lost company. Mr. Lining also returned to the company. They were called "saviours" by some Lining employees.

"Frankly speaking, the challenges and challenges faced by Li Ning Co are more severe than the challenges I face in other companies."

Jin Zhenjun admitted when he took office.

According to the three quarter results released by Adidas in November last year, sales in the Greater China region achieved a year-on-year growth of 13%, while Anta grew by 22.4% in the first half of 2014. The first half of November saw a 8% increase in revenue and a loss of 586 million yuan.

Now, a cold result is that Jin Zhenjun failed to perform miracles in the Li Ning Co. Facing the continued loss performance and the prospect of the future, he was the only one who could get out.

This scene is very similar to the outcome of Jin Zhenjun's predecessor, Lining CEO Zhang Zhiyong.

In July 4, 2012, Zhang Zhiyong, the elder statesman of the Li Ning Co, was appointed to the post of chief executive officer, which was jointly executed by Jin Zhenjun and Lining. Lining himself took charge of the external affairs and relations of the company, and Jin Zhenjun took charge of the development and operation of the internal affairs.

Since March 21, 2014, Jin Zhenjun has been acting as chief executive officer of Li Ning Co.

Jin Zhenjun is a typical foreigner, and Lining is a local brand who has been beaten up in the "golden age" of domestic sports brands.

Without the experience of grassroots work and life, for the complex Chinese market, he is obviously not as familiar with Jinjiang brand as Anta and PEAK.

At present, whether Jin Zhenjun really quit or not yet has no answer yet. But it is more and more clear that in the 2 years when Jin Zhenjun was at the helm, when the whole industry is recovering, the Li Ning Co has not yet been out of trouble.

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What did Jin Zhenjun do in two years?

In fact, when Jin Zhenjun took over Li Ning Co, the company faced many problems, such as the failure of brand remolding, high level turbulence and stock price drop.

At that time, the departure of Zhang Zhiyong, chief executive officer, made Lining worse. Jin Zhenjun himself made bold efforts to carry out a series of reforms to Lining.

From the adjustment of organizational structure to the replacement of management, to the three stage of reform that is still being carried out by Lining, the change direction presented by Jin Zhenjun is not wrong in the industry. The first stage is 6 to 12 months to solve 6 short-term problems, namely inventory, cost, organization execution capability, channel, core business and marketing efficiency improvement. The second stage improved the supply chain management, marketing and product planning mode from 2012 to 2014, focusing on product development and consumer experience to consolidate the leading position of Lining brand in the Chinese sporting goods market. The third stage started from 2 to 4 years to pform the business mode, while improving the retail efficiency and return on investment while meeting the consumer's brand experience.

Most importantly, under the leadership of Jin Zhenjun, the company began to expand its direct business.

Statistics show that in June 2012, Lining had 6657 franchises, 646 Direct stores, and 20.8% direct sales. In June 2014, Lining had 4552 franchisees and 1119 direct outlets, accounting for 38.3% of its direct sales.

Lining's brand positioning is clear: the middle end of the card.

Jin Zhenjun once said that what the Lining brand wants to grasp is the opportunity for the masses to return to rational consumption, and take the mid end consumer market as a breakthrough point.

In fact, Jin Zhenjun's strong reform has also brought him unprecedented resistance: because many executives have been replaced.

A serious separation has occurred, which has caused the problem of execution.

"Zhang Zhiyong is talking about it. Kim is too fierce. Many people are not accustomed to it. Their hearts are not necessarily supportive."

Lining, a senior executive who left soon, once said, "the direction of his reform is right, but I don't know much about Lining's difference from Daphne."

It is impossible to assess whether Jin Zhenjun's reform has been successful in the past two years.

However, according to the public data released by Li Ning Co in the past two years, Lining's losses narrowed to 392 million yuan in 2013, but the losses in the first half of this year expanded again, losing 586 million yuan.

At the same time, Lining became the only 5 listed sports brand in the first half of 2014.

At the same time, Lining kept closing, and as of June 30th last year, the number of its stores was reduced from 8255 in early 2012 to 5671.

"Cold winter" continued last year, "Lining" closed shop 519

Lining, Anta, PEAK, Hongxing Erke, these familiar Chinese sports brands had experienced the "golden ten years" of high-speed growth before 2010, and their performance began to decline as a whole since 2011.

Last November 17th, the Li Ning Co announced that Kim Jun Chun's outgoing chief executive, who left the US professional manager who was called Lining's savior in 2012, seems to have passed the signal of change failure.

PEAK sports announced earlier that the total order volume in the first quarter of 2015 recorded an increase of 10%-20%.

Up to now, PEAK has been placing orders for 4 consecutive quarters to achieve growth.

361 degree recently released the second quarter 2014 business report shows that its order in winter will be better than expected, and wholesale orders will increase by 8% compared with last winter's orders.

In Wuhan alone, according to a person in charge of the Wuhan clothing trade association, "the development trend of local sports brands is not optimistic in the past two years.

For the Lining family alone, compared with three years ago, the number of closed stores was more than 1/3.

In fact, the cold winter of Chinese sports brands can be traced back to 2008.

At that time, the Beijing Olympic Games led to an unprecedented movement in China.

In those years, domestic sports brands sprang up like mushrooms, and many brands also welcomed the golden age of development at that time.

Next, some blindly expanding sports brands are gradually beginning to taste bitter fruits, declining performance, losses and outbreaks of shops. The market is dissatisfied with the movement of sports brands in the swing between "Pan fashion" and sports.

China's sports brand is at a low ebb. At the same time, fast fashion brands are squeezing the market.

According to statistics, as of the end of 2013, the total stock of six major sports brands in China, Lining, Anta, PEAK, 31st degree, China trend and XTEP, amounted to 3 billion 100 million yuan.

Historical data show that by the end of 2011, the total inventory of the six major brands was 3 billion 699 million yuan, rising to 3 billion 721 million yuan by mid 2012.

Apart from the unknown number of shops in China, Lining,

PEAK, XTEP and XTEP have closed more than 2000 stores last year, of which 360 degrees and Lining have the largest number of shops, 783 and 519 respectively.