Li Ning Co Changed Its Old Business Style After Recovering Its Vitality

After recovery

With the increasingly pragmatic style, steady and prudent pursuit of reasonable and healthy growth, it has become the main keynote of management.

According to the world clothing and shoe net, in August 11th, Li Ning Co announced its medium-term performance in 2017, and its financial performance continued to improve. In the first half of this year, its operating income reached 3 billion 996 million yuan, up 11% compared with the same period last year, and its gross profit margin rose to 47.7%. Net profit reached 189 million, up 67% from the same period last year, showing a trend of accelerating the recovery of the Soviet Union.

At the micro operational level, the characteristics of Li Ning Co's "intensive farming" are increasingly obvious. The number of units in the same store sales has increased, the sales rate of new products has increased by 4 percentage points, and the inventory level of the channel has remained stable.

As a leading indicator, orders for orders increased year by year for the 15 consecutive quarter. The first quarter of 2018, which was signed in the latest phase, recorded a high number of units per year.

If the growth rate of 11% is maintained at a constant rate of 8 billion in 2016, it is expected to return to 10 billion in 2018.

On the press conference, Lining himself and company CFO Ceng Huafeng relaxed expression, but after the recovery of the Li Ning Co, the style is increasingly pragmatic, steady, prudent, and pursue reasonable and healthy growth, and has become the main keynote of business.

In the interim results conference, there are three messages to confirm:

1) the channel is insured.

Li Ning Co continued to adjust its channels. In the first half of 2017, the number of sales outlets was reduced by 111 by strategically closing down inefficient and loss stores. At the same time, the strategy of refining leading shops and expanding 400-500 square meters of efficient stores was adopted to enhance single store efficiency and profitability.

Ceng Huafeng revealed that Lining is expected.

The net will be reduced by 200-300 stores, opening up about 100 Lining Young children's wear shops, and the total number of stores will drop by 100-200.

Meanwhile, Lining is in

To increase investment in precision digital operation, we will apply the trend prediction system to the coordination and integration of commodity planning and group cargo, speed up the supply chain, and more precise and precise operation.

In the first half of 2017, Lining's e-commerce business maintained a more efficient operation efficiency, and its revenue grew by 58% over the same period. It is estimated that the annual revenue will be about 19-20%.

2) open source does not change throttling

Due to the steady upward trend in the performance of channel partners, a substantial increase in the receivables collection and a substantial improvement in the cash flow situation of Li Ning Co were achieved. In the first half of 2017, the net cash generated from operating activities was 589 million yuan. As at the end of June, the company held 2 billion 365 million cash and cash equivalents, representing a net increase of 4.11 billion over the same period last year.

In addition, up to 568 million of the convertible bonds have been converted into stocks, Li Ning Co's liabilities have been greatly reduced, and the interest expense has been 67 million 482 thousand in the first half of last year, and this year it has been converted to more than 800 income.

It can be said that the financial situation is rare in recent years.

Rao is so, in terms of expenditure, in addition to the fast growth of new compensation business, the expenses of advertising, marketing and travel are strictly controlled and no dividend has been recovered.

3) trial and error new business

The resurgent Li Ning Co began investing in new areas to diversify brand portfolios.

In the first half of 2017, the Danskin brand refined its product line, the flagship fashion movement, the pure fashion and the Ballet Series (Dance). It expects to open 3 to 5 sales outlets in the fourth quarter of 2017, focusing on the landmark shopping malls of influential cities.

The brand name of the fast fashion brand of leisure sports is maintained. The brand takes the mature shopping mall as the main objective to expand the market, and continues to optimize the products. 8 outlets have been set up in cities such as Beijing, Shanghai, Hefei, Dalian and Qingdao.

Lining YOUNG has opened about 20 outlets in 14 provinces across the country and is concentrated in the northern region.

The three new businesses are still in the incubation stage, and the whole year is expected to lose more than 9000 million. Lining himself said that "reasonable and prudent use of resources to explore new business opportunities and market potential, in the product and merchandise plan, the new business will conduct market tests and explore new businesses. The team should take a prudent conservative and rigorous focus, accelerate learning and pursue results oriented."

The potential of this sports company is not just new businesses, but its core category basketball and sports fads, which account for 22% and 16% of retail sales respectively, grew by only 5% and 2% in the first half of the year. In response to a reporter's question, Lining thought that two major categories needed new methodologies to expand business.

Lining emphasized that building a Lining experience value based on products, channels and retail operation capabilities will be the theme of the future.

Admittedly, the company has recovered its vitality, but Lining, after many years of pformation, is more steady.

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