Lining Rescuing Lining: Interpreting The World With "Surviving"

There is a domestic sports shoes during the National Day holiday fire, it is the National Day parade, the 100 thousand people's parade square, about 70 thousand people wear Lining unbounded sneakers - "square and the same street - you can have."

Lining's stock index is also popular. In October 9th, the Hong Kong dollar Lining (02331.HK) dollar rose rapidly after the opening, and hit a record high of HK $25.65. Lining's stock price has risen by over 204% since the beginning of this year.

According to Credit Suisse's research report, from the first week of July to the end of September, Lining's online clothing price rose by 7% on average. The price premium of Lining's clothing has also expanded in the past few weeks. Now it is 47% higher than Ann and 68% higher. At the same time, Lining's weekly footwear average price rose by 6%. As a result, the bank raised the Lining target price from 23.6 Hong Kong dollars to HK $26.3, and the rating is "outperforming the big market" and is the first choice for the industry.

Morgan Stanley reported that in 2019, Lining (02331.HK) was a strong year, with sales expected to rise by 32% and regular profits to rise by 87%. At present, the company's weaknesses are in the channel management and supply chain, but the bank expects that the new CEO will help improve the company's weaknesses in the supply chain and channel management in the future.

The bank expects Lining's regular profit growth of 2019-21 years to be 87%, 46% and 31% respectively, and is estimated to be 16%-22% higher than other brokerages. By 2021, the company's operating interest rate is expected to reach 14.8%. The price of Lining increased from HK $22 to HK $29.2, and the rating rose from "synchronized with the big market" to "overweight". As one of the most empathetic ethnic enterprises in China, Lining finally began to harvest everything he expected. But not long ago, people's impression of it was two.

Downwind after the advent of the world

In April 1989, Lining officially registered the "Lining brand" trademark and printed the two word "Lining" on the clothes. Lining's Gymnastic title and its influence reduced much trouble to the financing of the previous company. Only eight months later, the 5000 level workshop of Lining was built. In May 1990, Li Ning Co started its production in Sanshui, Guangdong, and was formally put into production.

Like all the producers, Li Ninggang began to worry about how to sell his things. He wants to take part in the torch relay of the Eleventh Asian Games to be held in Beijing, but the torch relay Office of the Asian Games has set a high price of 3 million dollars. Through unremitting efforts, Lining finally concluded the transaction with RMB 2 million 500 thousand.

On August 1990, in the Qinghai Tibet Plateau on the roof of the world, Lining took the snow and white Lining sportswear and took the torch of the Asian Games from Tibet girl Dava Ozon. 200 million people were directly involved in the torch relay of the Asian Games, and 2 billion 500 million of the audience knew the Lining card from the media. At this point, Lining is truly known to the world.

Since then, Li Ning Co has always taken the "Lining" brand as the main development power and become the pioneer of domestic sports brand.

After a shot, Lining began to expand the company's scale. In 1991, Jianlibao invested 16 million, and Guangdong Lining sporting goods company was formally established. It was responsible for the operation of Lining sportswear and sports shoes under Jianlibao's independence.

In 1992, Lining became the first Chinese sporting goods brand to appear in the Olympic Games. At the end of the year, Li Ning Co set up three companies in Beijing and Guangdong respectively, engaging in the production and operation of sportswear, casual wear and sports shoes.

Later, Lining series products gradually won the praise of the society, and became the special equipment for Chinese sports delegation to participate in all the major international competitions since 1991. The Lining brand clothing and sports shoes series were not only selected as Chinese star products, but also named as one of the ten famous brands in the national garment industry.

In 1993, Li Ning Co moved to Beijing to set up a franchise marketing system in the whole country. In just three years, Lining completed the transformation from athlete to entrepreneur.

However, in this process, the company's management has been exposing the problem of unclear production rights.

In early 1994, Liu Jipeng, an expert on stock reform, pointed out that unclear property rights would have a fatal negative effect on the future development. He hoped Lining would be separated from Jianlibao. But in the heart of Lining, Li Jingwei, the leader of Jianlibao, has made some recontributions to him. For Liu Jipeng's advice, Lining asked the most sentence: "if you break away from Jianlibao, will others say that I am ungrateful?" Liu Jipeng's answer: your boss is your boss, Jianlibao is Jianlibao, Lining is Lining. (Li Ning Co growth history: anything is possible.) 2016-11-15 snowball writer: steamed bread)

After Lining made this decision to explain his request to Jianlibao, Li Jingwei not only fully supported this, but also allowed Lining to repay the 16 million yuan invested by Jianlibao group by cash in three times, without raising interest rates. In early 1996, Lining moved the company headquarters from Guangdong to Beijing, renamed the Lining sportswear company, and bid farewell to Jianlibao.

Many people think that Lining has a reputation and good people to help him. Once he enters the business world, he will sail smoothly, but it is not as easy as he imagined. At the very beginning, Lining adopted the OEM OEM to produce Lining sports shoes. The development cost was only 500 thousand yuan, of which 200 thousand yuan was used for the production of 001 series shoes. After convening the meeting of relevant departments, Lining found that all the top executives of the company were all his retired teammates and his family. How could they do something well?

Since 1992, Lining has begun to consciously hire professional talents to join in, introducing a group of talents who are more familiar with the clothing market and have more mature control of the market. Since then, Li Ning Co has really started to get on the right track.

From 1993 to 1996, the sales revenue of Lining group increased by more than 100% a year, and in 1996 it set a record of 670 million. But Lining, who was excited, set a sales target of 1 billion in 1998 and 2 billion in 2000.

With the advent of the 1997 Asian financial crisis, all of this stopped abruptly. In the following years, the sales revenue of Li Ning Co has been hovering around 700 million until the arrival of a person. This person is called Chen Yihong. He has opened up a new era of Li Ning Co -- the era of professional managers.

The two key professional managers

Chen Yihong took office in 1998, but he and Lining met in 1991. From the start of business, Chen Yihong played the role of "commander" in the company. Years later, Lining had the following comments on Chen Yihong: he has a keen sense of business and is willing to take responsibility. He is a real businessman.

It is said that Lining's dream coupled with Chen Yihong's business talent has created the Li Ning Co's golden development period for ten years. From the reality, it seems that he led Lining to achieve more than 900 million sales in 2000, creating a record of domestic sports brands at that time.

However, in 2001, Chen Yihong finally chose to leave. The outside world has repeatedly speculated that the most widely spread statement is "because Li Ning Co has never been able to enter the club of 1 billion yuan". There is also a widespread speculation that Lining would prefer to put institutional into Lining's brand. Chen Yihong is "even the color of a pair of shoes and the style of a shirt. They like to meddle in it." when two people with such strong personalities collide together, Chen Yi red admits, "I know I will leave sooner or later."

In this way, Chen Yihong worked for Lining for 14 years and 9 months, resigned from the executive director's position, and the first generation of Li Ning Co professional managers fell off.

He sometimes brings this number up with a complacent tone of emotion. "I want to thank Lining, if he hadn't given me such a chance and platform, I wouldn't have had such experience today. Fortunately, I met him because, as I do, you call it a very arrogant person. Without his boss, we would not cooperate for so many years. It can also be said that it is because of me that we have been together for so many years before we have Lining and the trend. We should cherish our fate. (Lining and Chen Yihong: two people and their age 2017-07-08)

Lining talked about this many years later, saying: "a business veteran needs to leave. It's not that he has a hindrance. Sitting alone in a seat for too long is not good for this position. A growth firms needs to constantly change itself, and constantly introduce new talents that are more capable of meeting the stage of enterprise development. This is like a child, at what age, what to eat and what to do.

From 1997 onwards, Li Ning Co began a 27 month negative growth in sales. At that time, Zhang Zhiyong, a financial director, made bold decisions - making the shop offline. Because "more shops, you get more income, more income, the company's financial more, more financial, multiplied by percentage, the next step to increase investment in part." In 2001, Zhang Zhiyong was promoted to the front desk, but had to face the sales bottleneck which was hard to break through, the "1 billion target" in the indefinite period and the backlog of products that had been as high as about 600000.

But this year, Zhang Zhiyong led Lining to break through the $1 billion sales mark, which his predecessor Chen Yihong had not been able to accomplish. Then Zhang Zhiyong stripped off the kappa business that did not bring brand value to Lining, hired a team of top management with multinational companies such as P & G, Nike, Coca-Cola, and led Li Ning Co to go all the way.

In 2004, Li Ning Co listed in Hongkong and accumulated a cash of about 800 million yuan, which was prepared by Zhang Zhiyong for bidding for the 2008 Beijing Olympic Games sponsors. He admits that Lining and he shivered to fill an astronomical figure in the bidding book. According to Euro international statistics, in 2008, Lining's market share reached 9%, while Anta, XTEP and 31st degree were below 6%. In 2010, the company's turnover reached 9 billion 778 million, and it rushed to the billion club, and Lining entered the heyday.

But only a year later, in 2011, Li Ning Co's performance declined for the first time after the listing. Net profit dropped 65% to 380 million yuan over the same period last year, bottom of the local head sports brand, inventories grew by 40% yuan to 1 billion 100 million yuan, and the average stock turnover days increased to 73 days, which is more than doubled than that of Anta. The next 2012 was a turning point. Anta first surpassed Lining with a 880 million yuan revenue margin, and the throne of the local sports boss has not changed.

Three reasons for peak slipping

Lining's peak slipped down. Generally speaking, the reasons are mainly the following three points. First, blind expansion. The hot 2008 made it excessive anticipation of market demand and increased excessive inventory. Lining has long adopted the mode of "Direct stores + franchised stores", and has accelerated the expansion of distribution channels. In this way, in the absence of effective management of supply chain and retail end in the period of high speed expansion, distributors are dominant, which leads to lack of communication between brands and customers, and it is difficult to react quickly to market changes.

Lining, China's largest sports brand sales network, has 7748 retail outlets, but only 474 of them are directly managed by the Li Ning Co. 60% of the remaining stores are operated by about 2000 inexperienced retailers. They are reluctant to cut prices and clear up the off-season stocks, leaving little room for new high priced products.

The problem of distributors led to the Li Ning Co being forced to cut down dealers after the market became cold. But the cut dealers were ordered to return to the company in season and increased their inventory burden. The reduction of dealers has also led to changes in some of the small and medium dealers. Local brands such as Anta, 361 degree and so on have targeted attacks on Li Ning Co, or even directly used cash to acquire Li Ning Co channels. Old rivals Nike and Adidas are sinking into the three line market that once was the base of Li Ning Co. The survival of Li Ning Co suddenly became extraordinarily difficult.

The two is the mistake of positioning. In 2009, the company announced that the core of the future of Lining's brand was badminton. It aroused widespread suspicion, because badminton has a small user base compared with basketball and soccer. At the end of June 2010, marking the opening of the new logo, the management team threw out the brand remolding strategy and launched the concept of "post-90s Lining". At the same time, the new slogan "madethe change" is replaced by what is known as "anything is possible".

Before changing advertising signs, the company convened the board of directors and placed four alternative LOGO on the table. The high level decision was uncertain, so that Lining, who had not appeared in the company for a long time, came up with an idea. But for the company's bid, Lining knew only a few hours earlier than the ordinary employees of the company. The reason why this is done is that Lining's actual consumer spending is more than 50% of the 30-45 year old. The company's policy makers believe that the larger market is concentrated at 15-30 years old, resulting in the 90's not buying. The original 80 after 70 also began to abandon Lining.

The three is the deviation in pricing. In the years when Lining was growing rapidly, he positioned himself as a two or three tier market. But in 2010, Li Ning Co suddenly increased its price dramatically, and abandoned the original two or three line positioning and cost-effective advantages. The mainstream product price increased from 250 yuan to more than 390 yuan. It directly contended with Adidas and Nike on price, but the quality and reputation of products could not compare with others, resulting in a large number of consumers losing.

The forced elevation of position did not lead Lining to "internationalization", but made the brand positioning in an awkward position. The price hike continued until July 2011, and in the middle it happened to catch up with the Li Ning Co.

The price of new products increased after the bid change, which made it difficult for Li Ning Co to accept the main consumer groups in the second tier, three tier and four tier cities, and the number of orders and orders declined by 17% over the same period.

In 2011, Lining's revenue began to slide, and its losses in 2012 were nearly 2 billion. In 2013, the losses narrowed, but the battalion fell to 5 billion 218 million. In the 2012-2014 three years, it lost nearly 3 billion, and burned Lining's brilliance after 2008 Olympic Games. According to "finance and economics" report, as early as in July 2011, Zhang Zhiyong first resigned to the board of directors, Lining did not agree, and wrote an open letter to express Zhang's support, said to give him three years, but only a year less, Zhang Zhiyong resigned.

Third change of professional managers

In mid 2012, the Li Ning Co announced that Zhang Zhiyong was stepping down from office, and that his company's business was temporarily taken over by Lining himself and partner Jin Zhenjun of the company's shareholder TPG. Jin Zhenjun is a professional Korean American professional manager. He graduated from Harvard and was famous for saving Daphne. In March 2014, he was appointed Deputy Chief Executive Officer.

When Jin Zhenjun took office, Lining closed 1821 stores. Kim Chu Jun, a high inventor, first chose to adjust the channel. He also led the retail model reform to shorten the product development cycle of up to 15 months to 9 months.

In 2013, Lining's gross profit margin has recovered from 37.7% in 2012 to 44.5%. It has changed from the top four domestic brands to the highest in one fell swoop. The growth of gross profit margin approaching 8 points in one year can almost be described as inconceivable. This mode transformation not only solved Lining's profit problem at that time, but also laid a foundation for future development.

In 2014, Lining's total turnover increased by nearly 1 billion. Starting from the second half of 2014, orders for orders increased year by year. In the three or four quarter of 2014, the same store sales increased to a positive rate. In the fourth quarter of 2014, the number of units increased in the same quarter. Before Lining left office, Lining's business began to recover gradually.

Judging from the operation of the company, the reform of Li Ning Co has achieved initial success, and the company's business has begun to get on the right track, but the bad financial situation has greatly reduced the reputation of the company. Mention Jin Zhenjun, people remember not what he did to Li Ning Co, but 3 years' huge loss 3 billion. It is universally regarded as the chief culprit that Lining is getting deeper and deeper in the mire. His international background met Lining's Chinese company, and his low execution power was widely criticized.

However, in November 2014, in the announcement of the resignation of the acting chief executive, Jin Zhenjun said, "we have completed the expected goal of this stage of business restructuring." He said that there are three objectives: the first stage is to improve short-term efficiency of channel efficiency and profitability, and to clean up inventory problems. The second stage of reform (2013 to 2014) focuses on improving supply chain, marketing and product planning models, including product development and consumer experience. The third stage (the next 2 to 4 years) will ensure that the group has the right business model to improve profit structure and channel, retail efficiency, and cash and return on investment.

There are various signs that Li Ning Co's reform has achieved initial success after a series of initiatives. The company's cash flow has been improved, its channel structure has been healthier, its profitability has been enhanced, and a more effective sales system has been basically formed. Sponsoring CBA and signing Wade have practiced Li Ning Co's strategy of focusing on sports and focusing on China's market with practical actions. At the same time, it has greatly boosted the brand and demonstrated professional strength, and the sales of innovative technology products and fast reaction products are high and popular. (Jin Zhenjun: Lining's power to change China brand network)

Objectively speaking, the first two points have basically been completed, but the third point, especially in terms of profit structure, cash and return on investment, is still far from the public expectation. As an ordinary person and even an investor, this is often the point. For this reason, Jin Zhenjun's announcement was unanimously ridiculed by the media and the public.

However, the statement was confirmed by Lining. "After he came to the company, he took over the whole operation of the company and made a lot of efforts. He also made plans for transformation from retail, product, supply chain and channel, and made many plans and execution. Some of what we are doing now has been adhered to since then. In 2019, Lining's remarks seemed to be polite, but it was a fact in his mind.

Lining returns again

Along with Kim Jun Chun's departure, at the end of 2014, Lining returned to the company's front-line management as "agent CEO". In 2015, it turned out to be a profit, and the outside world was also generous with its words. "Let's go back to life" to describe Lining's return to "fire fighting".

When it comes to this problem, Lining does not recognize the so-called "death" and "life". The loss in 2012 and 2013 is a financial loss arising from the strategic adjustment of our company. It is just that the whole company has to digest the accumulated problems in the past and transform them into new ones. However, the process that has not been completely constructed is extremely inefficient, so the losses it generates is also normal and within the company's scope. So the word "revive the dead" may be dramatic.

This is not polite, but the adjustment process is not easy.

In 2015, Lining laid off workers and opened up strict cost control. This is reflected in one detail. Every year, a performance conference held in Hongkong, such as a hotel in JW Marriott and Shangri-La, has been moved to a conference room of an office building in central since 2015. Before the Spring Festival of 2015, Lining did not issue year-end awards. In 2015, the advertising and marketing expenses of Li Ning Co decreased by 210 million yuan compared with 2014, the cost of staff decreased by about 26 million, management consulting fees were cut by half, and by 37 million, the travel and entertainment expenses decreased by more than 16 million compared with the same period last year.

In 2015, it was a crucial year in the history of Li Ning Co. After three consecutive years of losses, the year turned to profitability. Revenue growth increased from 3.6% in 2014 to 17.23%, and net profit was 14 million 300 thousand. To a certain extent, this tiny profit is saved by strict cost control, but compared to the 3 billion 100 million deficit in three years, Lining completed the first step in stopping bleeding.

Lining adjusted the organizational structure to make it more flat, and "seek the best efficiency in the company structure". After a series of adjustments, Lining's asset efficiency and debt ratio have improved significantly. In 2015, average inventory turnover days and average receivables turnover days were reduced by 10 days, and in 2016, they were greatly reduced by 18 days. The asset liability ratio decreased from 86.4% in 2014 to 40.5%, and then dropped to 19.2% in 2016. Although these figures are not the best in the industry, they have made great progress and gradually become healthy.

It can be said that in 2017, as a nodal point, Lining's retail transformation was initially completed. In the past 10 years, the problem of accumulation of wholesale mode has basically been swept away, and more can be launched to pave the way for the future.

In 2007, Lining had 6245 stores, of which only 310 were direct stores. In 2017, Lining had 6262 stores and 1541 Direct stores. It was five times more than 10 years ago, and the sales of single stores in the direct stores reached 1 million 750 thousand yuan, compared with 1 million 570 thousand yuan in 2016, with a contribution of over 30%.

In terms of e-commerce, the Li Ning Co showed a faster growth rate. The growth rate in 2017 was more than 47%, accounting for 19% of revenue, up 4.7 percentage points from the same period last year, reaching 1 billion 686 million yuan. That is to say, the two battalions of Direct stores and electricity suppliers, which are directly faced with the consumer business by Lining, have reached half of the total revenue. (changing China's Lining billion euro network release time: 02-13)

Today, it seems that at the end of 2014, when Kim Jin Jun left office, Lining took the helm himself. The main task was to let the strategy formulated in 2012 -2014 be effectively implemented in the subsequent daily work, which is to strengthen the executive power of the company.

Force children's clothing and layout competition

After the losses were reversed, Lining began his planned expansion. In July 2015, Li Ning Co announced that the strategic direction will be shifted from sports equipment providers to "Internet + sports life experience" providers. Behind this new strategy, it means to build up a "digital business platform" in products, channels, O2O mode, consumer interaction mode and the construction of digital business platform.

In 2017, Lining's big move was to launch the children's wear market. The original Lining KIDS was remodeled and upgraded to Lining YOUNG. At the same time, 3-14 year old teenagers were targeted to target consumers. For different age groups, two product lines were set up: 3-6 year old curious children and 7-14 year old dynamic juveniles, extending the coverage of shoes to running training, basketball and sports fashion.

Lining chose to develop children's clothes together with his partners. Lining's previous children's wear is the mode of authorized operation. Partners are not enough in input, financial strength and understanding of sports children's clothing market, which directly leads to the backwardness of Lining's children's wear channels. Lining realized this problem and no longer allowed himself to do nothing in the hot children's clothing market. This time he came back to reshape children's clothing categories and rose to the company's strategic level. Next, we will see Lining in the children's clothing market offensive, large-scale shop and force business channel. (Lining's "tide card" can save five years lost? 2018-05-1718:15)

In January 2019, Lining's outstanding China announced that it had acquired the Snake of the League of professional league (LPL) teams, competing for the layout. Lining accepted the 21CBR interview as a flagship platform for the development of the sports industry. About 25 billion of the Hong Kong dollar market value Li Ning Co was one of them, and said that 30 years after the creation of the Lining brand, 2019 will concentrate more energy and resources to expand the new cause of extraordinary China.

At the same time, Lining also tried to incubate sports community development as the core business, the key layout of which is the national fitness complex project "Lining Sports Park". Lining sports park is the most imaginative business in terms of China's existing business portfolio.

Lining Sports Park adopts the operation mode of "light assets", and the input of land and hardware facilities is mainly responsible for the government or the third party organization, and then the project is delivered to the entrusted operation of the extraordinary China. The latter provides experience services, training and event organization to the public, and the general entrusted period is 20-30 years. At the same time, the team will participate in the design and planning of the venues, and implant the understanding of mass sports, such as emphasizing the openness of the interior design, and encouraging the communication among the sports people.

In cooperation, the income of extraordinary China mainly comes from the use of venues, sports training, sports events, leasing of commercial facilities, and sales of sporting goods and beverage. According to Lining, taking the Lining Sports Park in Nanning (which is not attributable to the extraordinary China) as an example, it can generate about 50 million revenue a year. In addition, local governments will also provide appropriate subsidies according to their operation conditions to ensure the operation of the venues.

"The sports park is the most dynamic and most willing consumer group in Chinese cities. They like sports and pursue leisure and entertainment. We will have a large number of opportunities to develop the sports consumer goods when we run this group." Lining told 21CBR that apart from Li Ning Co, which focuses on sporting goods, extraordinary China is also looking for targets, taking into account the acquisition of healthy sports related consumer goods. (after 30 years of shoes and clothes, Lining opened his next venture. This opportunity has been waiting for 10 years. Twenty-first Century Business Review release time: 03-19)

The "post-90s Lining"

At the end of December 2017, Alibaba and New York fashion week co operated the activities of "China Day". "To find a brand that can represent China in the sports brand, Lining is the first choice." At that time, Lining, the chief designer of the BADFIVE basketball team in New York, said that he had been informed that the seven designers had to deliver 56 costumes to New York fashion week in a month. To accomplish this task, they needed the efficient cooperation of products, supply chain and channel parties themselves.

In the end, Lining himself won the Olympic Games, crossed Lining, and instantly became a retro series T-shirt pattern on the rings.

In February 2018 and June, Li Ning Co held two big shows in New York and Paris, and in February, its reputation and stock prices soared, and related products were sold out quickly. In the new season of Paris, the Lining brand is inspired by Lining's own athlete career and interpreted the trend of retro sports in 90s from the perspective of future. The shape of the 36 men's wear and 13 women's wear make up a total of 49 showrooms.

From the "Enlightenment" of New York to the two successful "Lining of China" this season, it shows that this brand of sports that has gone through 28 years of hard rain is returning to the vision of young people with a new temperament. After the fashion week in New York, 2ACE became one of the most attractive shoes in China.

"In the end, Lining grasped the opportunity that was never seen before, and let it shine." The social topics and acclaim of fashion week products have brought Lining back to the brand image of representing the status, high-end quality and fashion. In the eyes of media observers, this is a perfect brand return.

In 2010, Lining took the lead in calling "post-90s Lining". He wanted to compete for young people's favor with younger fashions and fashion products. But what he met was a new reluctance to take care of the old and abandon it. Lining himself probably didn't expect that he would really win the favour of young people after 8 years.

Such cases are likely to be included in the course of a business school. When the media tried to restore his brilliant thoughts and decisions through his own business decision, Lining always looked very calm. He said lightly that "the past attempts may not have hit (consumers and markets), and the second is that the market environment has changed." (changing China's Lining billion euro network release time: 02-13)

As an athlete, Lining once created the myth of gymnastics world and also experienced the curse of the whole nation. As an entrepreneur, Lining had created the myth of Chinese sports brand, and had also experienced the bitterness of the market failure. Such a huge gap, it may be difficult for a person to fall down any one of them, but every time Lining stands up tenaciously, licking blood and killing himself, and finally gets new life.

In the field of Lining, there are always women's volleyball champions who always win the championship. They give us always strong political aspirations. There is also a brilliant moment of Yao Ming, Liu Xiang and Li Na, giving us a stunning fame and fortune fantasy. But I think that for our nation, what we need most is Lining, not only because his ups and downs experience is a valuable asset to all people and industries, but also what he has done after crossing his own industry. It embodies the fact that the people of this era and the people as a whole can continue to move forward and even step into the great secret -- learning and transcending forever.

Only in this way can everything become possible.