Li Ning Company works hard? Let the change happen? .
September 12, Li Ning (0233 1. HK) Company confirmed that its Tsim Sha Tsui branch in Hong Kong was closed at the beginning of this month, which is the only branch of Li Ning Company in Hong Kong and settled in June 20 12. Li Ning Company did not make a positive statement on the reasons for closing its Hong Kong store, but said from a macro-strategic perspective that the reason for closing its Hong Kong store was to pay more attention to the mainland market.
A person engaged in sports marketing believes that there are still many problems in the mainland market according to the current situation of Li Ning Company. Closing Hong Kong stores and shrinking the international market front is equivalent to saving yourself by breaking your arm. In terms of communication, it will affect the international image of Li Ning brand, but from a practical point of view, it can reduce the bleeding point of the company.
International lockout?
Behind Li Ning's official statement, there are more realistic reasons for closing the store in Hong Kong.
The cost pressure brought by bad stores is the main reason for closing stores. On August 22nd, when the semi-annual report of Li Ning Company was released, Jin Zhenjun, executive vice chairman of Li Ning Company, said that in order to save costs, Li Ning Company closed 1.200 stores in the first half of the year as a whole, accounting for 15%, and the closing standard was inefficient stores.
This is the second time that Li Ning has encountered similar problems in the past two months. On July 9th, Li Ning Company confirmed that it received an email notification from LN PLUS IBEROAMERICA S.L (licensor) on July 4th this year, and filed for bankruptcy due to the deterioration of the Spanish market environment and poor management.
When 20 12 opened, the Hongkong store was regarded as the bridgehead of internationalization by Zhang Zhiyong, then CEO of Li Ning Company. At that time, the role of Hong Kong stores was to test Li Ning's products and pave the way for brand internationalization. According to his plan, by 20 18, Li Ning will become one of the top five sports brands in the world. By then, more than 20% of Li Ning's income will come from overseas markets, and 70- 100 badminton stores will be opened in Southeast Asia before the end of 20 12.
According to public data, in 20 12 years, Li Ning's overseas income accounted for 1.4% of the total income, while in 20 1 1 year, the ratio was about 1.9%. Compared with the established plan, the proportion of overseas income of Li Ning Company has not changed much in the past three years. With the bankruptcy of Spanish licensors and other events, Li Ning's internationalization goal cannot be achieved in the short term.
The aforementioned marketer said,? The more important problem for Li Ning Company now is how to save itself. From Li Ning's return to the management and Zhang Zhiyong's departure, we can see that Li Ning has realized the seriousness of the challenge. ?
Li Ning said that after all, there are many situations in overseas markets that are different from those in the mainland market. The business in overseas markets, including Hong Kong, is still in the exploratory stage and should be carried out in a way that can control risks and costs. At present, the company's strategy is still focused on the development of the mainland market.
Difficult self-help
At the same time of international contraction, Li Ning Company has made up its mind? Save yourself? Strategy.
The first stage of this strategy is to improve channel inventory and enhance channel profitability; The second stage will focus on improving the group's supply chain, marketing and product planning model, including product development and consumer experience; The third stage will improve the profit structure and channels, retail efficiency and cash and investment returns.
Clean up inventory and become Li Ning Company? Save yourself? An inevitable step. 20 12 semi-annual report shows that Li Ning's inventory situation did not improve in the first half of the year, and the average inventory turnover period rose to 95 days. According to the data of the annual report of Li Ning 20 1 1, the average inventory turnover days of 201are 73 days, which is 2 1 day more than 52 days of 20 12, and almost twice that of Anta Sports.
The annual report of 201/kloc-0 shows that the inventory of Li Ning Company in 20 1 1 was165438+33 million yuan, an increase of 4064% compared with 806 million yuan in 20 12. High inventory increased the inventory depreciation reserve of Li Ning in 20 1 1 year to1880,000 yuan, an increase of 63.48% compared with 20 12 year.
On June 12, according to the announcement of Li Ning Company, the company's order amount in the fourth quarter showed a double-digit high decline. Among them, the order amount of footwear products showed a low double-digit decline, and its average retail price and order quantity showed a low single-digit and low double-digit decline respectively. In terms of clothing, the order amount dropped by more than 20%. Li Ning Company predicts a loss of 226 million yuan for the whole year.
The aforementioned sports marketers said that for the sporting goods industry, high inventory is extremely harmful and will have adverse side effects on the whole chain from design, procurement to sales. Therefore, Li Ning's approach is correct.
The announcement two months ago? Save yourself? For the planned Li Ning Company, the challenge is still severe. Li Ning's 20 12 semi-annual financial report shows that the company's revenue in the first half of the year was 3.88 billion yuan, down 9.5% year-on-year; The net profit attributable to shareholders of listed companies was 44 million yuan, down 84.9% year-on-year. In contrast, Anta Sports had a turnover of 3.934 billion yuan and a net profit of 770 million yuan in the first half of the year.
According to the relevant statement of Li Ning Company and the three stages? Save yourself? Arrange the rhythm, improve the channel inventory and enhance the channel profitability, and see results as soon as possible or in the second half of the year. However, Bank of America Merrill Lynch pointed out that there are still unstable factors in Li Ning's business reform, and it is expected that the profit will not improve until the second half of next year. ;