Lining Is The Opposite: Fashion Line Dividends Continue To Release Two Guarantee A Long Road Ahead.

In the first half of June 30th, the domestic sports apparel brand Lining (demand area: 100-300 square meters, has entered 329 shopping centers, plans to open 300 this year) (02331.HK) sales rose 33% to 6 billion 250 million yuan, gross profit margin increased by one percentage point to 49.7%, net profit increased 196% to 795 million yuan, operating cash flow increased 107% to 1 billion 366 million yuan.

Lining's stock price has increased by 131.65% since the beginning of this year, and its market value is nearly three times that of the same period last year. After issuing the first half performance report, Lining's stock price rose immediately, and its market value was about HK $47 billion 800 million, a record high, approaching the historical peak of Lining's stock price of HK $21.637 in 2009.

Abstract: we should deepen the strategy of "single brand, multi category and multi-channel" to promote the efficiency of channels.

In his report, Lining stressed that the group should deepen the strategy of "single brand, multi category and multi-channel" to promote the efficiency of channels.

We should strengthen professional sports attributes, capture the trend culture elements, upgrade product strength and brand power, accelerate diversified development of channels, optimize commodity and retail operation capabilities, enhance channel efficiency, focus on product innovation, upgrade consumption experience, and continuously push forward the business of e-commerce, and continuously push forward the supply chain optimization of "demand driven".

The report shows that the overall retail flow (including online and offline) recorded low 20%-30% growth; channel library sales ratio continued to improve; the same store sales in the first half of 2019 recorded a median growth in 10%-20%; the new line of retail sales recorded a growth in the middle of 10%-20%; gross margin improvement: the new product discount rate improved by more than 1 percentage points, and the sales rate increased by more than 2 percentage points.

According to the product category, the income of clothing business is higher than that of footwear business, increasing 33% to 3 billion 60 million yuan, contributing 48.9% income. Footwear business increased 33% to 2 billion 922 million RMB, contributing 46.7% revenue. According to the sales channels, income distribution, direct sales and sales accounted for 5.1 percentage points lower than the same period, the franchisee channel grew 4.2 percentage points to 48.6%, the electricity business accounted for 21.7%, and the international market sales increased by 32.4% to 97 million 500 thousand yuan. According to the income of the region, the market share of the northern market is 51%, the income of the Southern China department is the fastest and the growth rate is about 44%. Although the international market is 1.6%, its growth rate is over 30%.

Positive: frequent International Fashion Week fashion dividends continue to release

In the mid-term earnings report, Lining concluded that the main reason for the rise in revenue was that through the effective integration of Chinese elements and their own "sports genes", the recognition of Lining brand improved significantly. The beginning of this strategy should start from last year.

In February last year, Lining first came to New York fashion week by chance. As a result, Lining began to use the international fashion Monday road to open up the situation, frequent Paris men's clothing week, New York fashion week, the fashion of the country to refresh the impression of the outside world on Lining.

Last year, Lining first broke tens of billions of times in 8 years, and the group revenue grew 18% to 10 billion 511 million yuan over the same period.

In March this year, when Lining held the product launch of the fashion line 2019 autumn and winter in Shanghai, he first put forward the concept of Lining fashion line, and made clear the positioning of the product line aiming at the high-end market in sports fashion style.

While the market positioning is constantly clear, Lining's fashion ideas and products are also maturing. Today, in June, when the fashion line was formally put forward, Lining released the latest 2020 spring summer series in Paris men's wear week. From the packaging of the multiple elements, the symbolic surface tries to dress culture and express itself in stylish language.

Fashion has become a weapon for Lining to recover from the past. Moreover, the strategy of Lining sports is becoming clearer and clearer. The main idea is to enhance the fashion and tide brand of sports shoes and sportswear by strengthening the property of "China Lining".

Lining insisted on the development of fashion as an independent business while insisting on the orientation of professional sports. Li Ning Co said in its interim earnings report that the group will strengthen its professional attributes and capture the trend elements to upgrade its product quality. Focus on core categories, and deepen the overall layout of marketing.

In terms of products, Lining focused on basketball, running, training, badminton and sports fashion five core categories to meet consumer demand for functional categories of different categories. In the first half of this year, Lining basketball category retail sales rose 44%, accounting for 28%, including China Lining sports fashion retail water rose 54%, accounting for 29%; Lining running category retail water dropped 8%, accounting for 21%; training retail sales increased 14%, accounting for 20%.

China Lining's sports fashion clothing series 2019 sold more than 5 million 200 thousand total sales in the first half of the year, and the new products sold out more than 50%, and the shoes series sold more than 40 thousand pairs in the first half of the year.

In addition to products, Lining's overall channel structure is also constantly optimized. The group transferred some of its original stores to distributors, and agreed to set up big stores and fashion shops to increase the revenue of franchisees in the 40% quarter. In the first half of the year, a series of indicators such as the 10% to 20% growth in the first half of the same store sales in the first half of 2019 reflected a significant increase in the efficiency of retail operation.

Lining's main channels include efficient shops, China Lining and Chao Dian, professional sports shops and clearance channels. Lining's fashion line has begun to extend its layout to online and offline channels. The electricity supplier has also become one of the fastest growing channels for Lining. The mid term financial report shows that the proportion of e-commerce channel revenue continues to rise, the growth rate recorded a 30% high growth.

In addition, the addition of fashion lines brings challenges to the efficiency of design and supply chain. The basic development period of the big goods sports life class is 18 months from product creativity to listing, and fashion is usually 3 to 6 months. In the past, Lining's brand was mainly based on outsourcing, which could not improve efficiency and guarantee the brand's wishes to be successfully realized.

In the interim report, Lining said that the supply chain optimization of "demand driven" will continue to be promoted to create a benign dynamic supply chain management. It is reported that this year, Lining group's investment supply base in Guangxi was officially launched, opening the "self built factory" mode, which can provide shoes for self production, and the brand has begun to build factories and self built small version rooms, and can sample clothes and projects in small quantities.

The opposite: it is still a long way to go before Anta gets over eight years to protect two.

As early as 2010, Lining was the first in the industry. But just a step away from the 10 billion sales, there are a series of blunders, such as the blind upgrading of the brand, the lust for light assets, the unclear strategy of many brands, and the distraction of Lining himself.

From 2012 to 2014, China made a big reshuffle of the sports footwear industry. Li Ning Co accumulated a total loss of 3 billion yuan. It was overtaken by Anta and lost the middle and low end market.

Since then, the gap between Anta and Lining has widened. In 2015, Anta achieved a revenue of 11 billion 126 million yuan and a net profit of 2 billion 40 million yuan. It became the first sports brand to enter the 10 billion club in China, and became the leader of domestic sporting goods. In addition, Anta has made steady progress in accordance with the established clear brand positioning and basic strategy, with sales as the main force, and deep ploughing three or four line cities to continue to play the advantage of scale.

Even if Lining has returned to the blood, Lining's market value is still less than 1/3 of Anta's.

At present, Lining's "fashion heart" is known to all. However, on the long term plan, Lining needs continuous innovation of products and launches explosive market to detonate the market.

Whether it is "professional" or "fashionable" or exploding, technology research and development is the core competitiveness of sports brands, which puts forward higher requirements for the design ability of Lining brand. But at present, Lining's spending on research and development is very low, after Lining said that R & D expenses will account for 2% of revenue. Anta's investment has remained above 5% in recent years, and Nike's R & D cost has reached 9%.

Lacking the core competitiveness of technology research and development, Lining will not only be unable to compete with Nike and Adi, but also can not guarantee absolute competitive advantage for some sports classic brands such as Puma and CONVERSE.

In addition, Lining's market size is also limited by many aspects. First of all, Lining's high-end fashion strategy has gradually affected the brand's channel strategy, with a second tier city as the main battleground, but the high rent of the second tier cities limits its expansion speed.

Secondly, apart from Lining's main brand, Lining maintained a relatively prudent development strategy for the acquisition of international brands. In 2016, it acquired the exclusive right to operate the American Dance brand Danskin in mainland China and Macao. The brand is positioned as high-end women's fashion sports brand, so far no accelerated expansion has been made. Lotto, the Italy sports brand, and the French outdoor brand Aigle AI Gao, Lining, did not make any effort.

Many brands of sports fashion brands have grasped the market segments, but the easier it is to segment them, the easier it is to get saturated. Lining also constantly stressed to the outside world that tide brand is not the direction of Lining, and fashion line is only part of the business. It can be seen that Lining has realized that ahead of the fashion trend of youth, ahead of schedule. How to find that precise point between "professional" and "fashion" is an absolute technological activity.

　　 Summary

In any case, Lining, who had turned against the wind, continued to carry forward the spirit of perseverance in the business community. Moreover, the new path of a non-traditional sporting goods brand has gradually emerged, and Lining's path has provided a good inspiration for China's sports market. With the strong recovery of the domestic sporting goods industry and returning to the fast growth channel, the new stage of development of the domestic sports giant is basically formed, and Lining will have more opportunities and more performance.