Lining Quick Response Products Establish Retail Oriented Business Mode

China's local sports brands suffered major crises last year. The reasons for the close closure of stores, early warning of earnings, exchange of blood from management teams, high inventory and declining orders have almost become the haze of all Honda sports brands. Among them, the Lining brand has become one of the "worst hit areas". During the four years after the end of the Beijing Olympic Games, Lining almost encountered all the problems that sports brands had to face.

Lining group's annual report 2012 showed that the company's revenue last year was 6 billion 739 million yuan, down 24.5% from the previous year, and the company's loss was 1 billion 979 million yuan, the first major loss in the company's listing in eight years. Lining's predicament also led to the almost retreat of the chairman of the board of directors, Lining himself, once again "out of the mountain" to "rescue" a Li Ning Co that was in crisis.

Last May, Jin Zhenjun, a partner of TPG Capital, one of the largest Private Equity Firm in the United States, led the team to "airborne" Lining. Jin Zhenjun successfully led Daphne out of the predicament in 2009, when Daphne was facing the same inventory problem. In July last year, Li Ning Co announced that Zhang Zhiyong, CEO of the board of directors, returned from office. Lining also announced the three phase of the change plan. In the first stage, we will focus on retail sales and inventory problems, improve product and operational costs, strengthen organization and execution capabilities, improve channel efficiency, profitability and performance, focus on core products and domestic markets, enhance brand input and improve marketing efficiency.

Jin Zhenjun told NetEase Finance yesterday that the first phase of the reform has been completed and the stock is close to the normal level. "In December last year, we launched a channel revival plan to deal with inventory problems. Since the second half of 2012, the level of channel inventory has continued to decline. By February 2013, the Treasury sales ratio was about 7 and a half months, significantly lower than the peak value of the 2 quarter of 2012, and it has been close to 6 months from our target sales ratio.

Jin Zhenjun also pointed out that the current Li Ning Co transformation has gradually entered the second stage. "This stage will comprehensively improve the supply chain, listing and product planning, and establish a retail oriented business model through guided orders, quick replenishment of best sellers, and rapid response products."