Lining Came Out Of The Mountain To Fight Fire Or CBA Or Money.

After calling for more than two years of Make The Change (let change) slogan, Lining At last, the company came to a thorough Make The Change.

Recently, Li Ning Co suddenly announced the "big issues" that the industry had long suspected. CEO Zhang Zhiyong retire Lining, founder of the new company, has taken charge of the company and unveiled a new reform plan.

This time, can Lining be able to save the Li Ning Co like the hand flying in the air of the bird's nest gymnasium? Or can he turn back like another famous entrepreneur, Liu Chuanzhi?

　　 Zhang Zhiyong resigned from reform failure

In July 5th, the Li Ning Co held a press briefing in Hongkong, announcing that CEO Zhang Zhiyong had retired as chief executive since July 4th.

Last year, former Lining chief brand official Shiwei, chief operating officer Guo Jianxin, Lotto general manager Wu Xianyong, chief product officer Xu Maochun, and government and public affairs director Zhang Xiaoyan and other senior executives have left. Now with Zhang Zhiyong, Li Ning Co executives have come to a radical change.

"From the recent personnel changes of Li Ning Co, we can see that this is a big chess game, but today it suddenly became a general." Sun Xi, a researcher at the Institute of public communication, Renmin University, told reporters.

For Zhang Zhiyong's resignation, Lining obviously did not want to talk much at this conference. He has been emphasizing that the board highly recognised Zhang Zhiyong's outstanding contribution. "First of all, it is the core business of leading Li Ning Co before CEO. Under his leadership, Li Ning Co has experienced rapid development. His resignation is the consideration of the current and future environment of the board and management, and now is the best time to reorganize the management team, which is most beneficial to shareholders and investors. Lining said at the press conference.

Zhang Zhiyong, a graduate of Central University of Finance and Economics in Shanghai, joined the Li Ning Co as a cashier in 1992, served as general manager in 2001, and was the company's CEO in 2004. He is the fourteenth employee in Li Ning Co history. He led Li Ning Co to break through the 1 billion yuan sales mark which lingered for a long time, and has been doing nearly 10 billion yuan in annual sales. It can be said that Zhang Zhiyong has contributed to the development of the Li Ning Co.

But that does not hide Zhang Zhiyong's blunders. Although the Li Ning Co did not answer the reason for Zhang Zhiyong's resignation at this press conference, everyone knew that this was Zhang Zhiyong's failure to pay for himself.

In 2010, Zhang Zhiyong led the Li Ning Co to announce the brand remolding, including a series of measures such as changing signs, adjusting channels and optimizing the structure, but now it seems that this behavior not only failed to increase the performance of Li Ning Co, but declined sharply. According to the Li Ning Co issued a performance warning notice in June this year, compared with the same period last year, the company expects the fourth quarter 2012 footwear products orders will have a two digit decline compared to the same period, clothing products orders will also have a drop of more than 20%.

In fact, because of the failure of brand remolding, Zhang Zhiyong criticized the Li Ning Co for a long time ago. "There is a problem in the internal management of an enterprise, and the external marketing is not enough. There is a problem in the development strategy of the enterprise. You say it is not the president who is responsible for the responsibility. Now Li Ning Co's bad business is definitely Zhang Zhiyong's responsibility." An insider who Lining declined to be named told reporters.

However, some people hold different opinions. "To tell the truth, this is not the responsibility of a person. When the strategy was formulated, the management was recognized and could not be held responsible by one person." Lining, a former manager who has left office, told reporters.

　 The key Road Sports Consulting Co., Ltd. CEO Zhang Qingceng and Zhang Zhiyong worked for 7 years.

He said that during the CEO period, Zhang Zhiyong brought the Li Ning Co from less than 1 billion yuan to nearly 9 billion yuan. Although there is a general trend in the growth of the industry, it is indispensable. Similarly, the contradictions accumulated in the process of rapid growth, especially the mistakes and oversight of certain decisions, employment and management, are also responsible. It is not advisable to exaggerate or belittle a person's positive or negative effects in an enterprise. Zhang Qing wrote in his personal micro-blog.

For Zhang Zhiyong who will take over the company after retiring from office, the Li Ning Co has made the following arrangements: before the appointment of the new chief executive, Li Ning Co will be managed by the founder Lining and executive vice president Jin Zhenjun. This means that Lining is likely to return to the mountain to take charge of the Li Ning Co.

In fact, as early as more than ten years ago, Lining himself has begun to leave the company's specific management positions, so at this time regression, also shows that Li Ning Co arrived in a very critical time.

"Over the past two years, Lining has returned to headquarters many times than before. He usually attended meetings and put forward his own opinions. It may also be caused by the pressure of performance. " The Li Ning Co insider, who declined to be named, told reporters.

Of course, at this time node, especially the Olympic marketing war, CEO absence has a great impact on the company. This time, there is no more suitable person than Lining himself to lead the company through this difficult journey.

Lining announced at the meeting that after the completion of management changes, he will focus mainly on external affairs, relations and company development strategies. Zhang Zhiyong will continue to serve as executive director of Li Ning Co and chief consultant of the Executive Committee, so as to ensure a smooth transition of the company's management before the new chief executive takes office. {page_break}

　 Lining introduced TPG

Or reform under the knife

In this press conference, it is worth noticing that two new faces have emerged, one is executive vice president Jin Zhenjun, and the other is independent non-executive director Su Jingshi. In particular, Jin Zhenjun, public information, Jin Zhenjun is Korean American, graduated from Harvard University, worked in McKinsey, DELL and other companies, is now a partner in the global private investment firm TPG and the head of Greater China, and at the same time as a number of TPG investment company's Dong duties, including Guanghui automobile, Daphne and so on.

In January 19th this year, Li Ning Co announced that two investors would subscribe to convertible bonds issued by the group: member companies of TPG and member companies of Singapore's Government Investment Corp (GIC).

Among them, TPG will subscribe to Li Ning Co's convertible bond of 561 million yuan, and GIC member company will subscribe for 189 million yuan convertible bonds. Assuming that all convertible bonds can be converted into shares, TPG occupies about 12% of the company's enlarged share capital, while GIC is 8%.

According to the conditions signed by TPG and Li Ning Co, TPG has the right to nominate two non executive directors to the board of directors, and the right to nominate a director (or other independent non-executive director) as a member of the audit committee, nomination committee and Remuneration Committee, and has the right to nominate two executive directors as members of the Executive Committee.

Speaking of the above transactions, Lining once said, "I expect our management can fully integrate TPG's expertise and resources to effectively promote the successful transformation of the group and achieve long-term and steady development."

In April of this year, Li Ning Co announced the appointment of two TPG members, Jin Zhenjun and Chen Yuexian, as non executive directors of Li Ning Co and entered the Executive Committee. The members of the Executive Committee include Lining and Zhang Zhiyong besides those two. At that time, insiders pointed out that Lining introduced TPG to reorganize the management team. Now it seems so.

At the conference, Lining revealed that TPG had already intervened in the management of the company two months ago. While TPG represents Jin Zhenjun, he is mainly responsible for the internal affairs and operation of the group, and promotes the transformation of the group during the transition period. This sends a strong signal to the outside world: TPG is going to work on Lining's reform.

Public information shows that TPG has 17 years of investment experience in China and has strong resources in the consumer and retail industries. Among them, it is commended that TPG has helped Daphne succeed in its transformation. 2009, TPG has fundamentally adjusted Daphne's business model, replacing it from its role as a retailer. Therefore, investors generally have high hopes for TPG's participation in Li Ning Co's transformation.

But even so, there are still many people questioning the TPG capability. At the conference, a reporter questioned TPG's experience and ability. Because sporting goods are different from other industries, TPG's past experience is still a problem.

"Do you think a woman selling shoes can sell sportswear? Introduction of TPG, I guess it is still capital level operation, or the use of capital to balance the inside of Lining." Sun Xi said.

But TPG is confident of Lining's reform. At the press conference, Jin Zhenjun has been emphasizing his retail management experience and TPG's successful transformation of Daphne.

At the meeting, the Li Ning Co announced the next stage of development plan to improve the current predicament. In the first stage, we should improve channel inventory and enhance channel profitability. The second stage will focus on improving the group's supply chain, marketing and product planning models, including product development and consumer experience. The third stage will improve profit structure and channel, retail efficiency, and cash and return on investment.

In this regard, Jin Zhenjun said at the press conference that this year's top priority is still to reduce inventories, and the company has taken measures earlier, but because it is the industry's overall problems, the results are slower than expected. Because everyone is on sale.

This year, we will continue to clear the stock through discount, hoping to become the first company to improve inventory level in the industry, and hope that in the next 6~12 months, the company's inventory can be reduced to near health level.

"In the next two to four years, Lining will embark on the transformation of the business model, so as to meet the consumer's brand experience while improving retail efficiency and return on investment." Jin Zhenjun said.

　 Betting CBA Return to sports funds tight

In June this year, Li Ning Co announced that it had signed a contract with CBA to become an equipment sponsor from the 2012~2013 season to the 2016~2017 season.

At this press conference, Lining revealed: "the details of the contract are being finalized with CBA." Lining believes that after years of development, CBA already has important commercial value and brand value. It has become one of the most popular and most loyal league matches in China, and its commercial operation is very mature.

In fact, with the help of CBA Lining, the intention is to return to sports. Before, under the leadership of Zhang Zhiyong, Li Ning Co was swaying between sports and fashion, so that a large number of consumers were lost. And its competitor Anta has achieved great success in its brand and performance through its cooperation with CBA for seven years. In 2011, Anta's revenue reached 8 billion 905 million yuan.

"From a long-term development perspective, this is an important strategy of the company. Through CBA Sponsoring Firm, we can make full use of his sports marketing brand to further strengthen the scale of Lining brand basketball sports and improve the proportion of basketball products in business. At the same time, it will also enhance the brand image in major cities of China through large-scale sponsorship activities. The board and management of the company believe that sponsorship of CBA conforms to the overall strategy of focusing on core brands and core products and focusing on the Chinese market. " Lining said.

But today's CBA is expensive. Although Lining did not disclose the specific sponsorship amount, there were media reports that the sponsorship amount was as high as 2 billion yuan, averaging 400 million yuan per season. In 2004, when Anta signed the sponsor of CBA, the amount was 3 years and 60 million yuan, even though the 5 year extension was still 20 million yuan per season. 8 years later, this figure has doubled 20 times.

In fact, Lining had the chance to sponsor CBA in those days, but at that time, he lost his job due to various reasons. "We thought it was a pity to lose CBA, and now we have to pay a big price to sign it back. In fact, there are different opinions internally. Nothing has happened, nor is it any good. An insider from Lining said.

There are two sides to the issue of sponsorship. First of all, the sponsorship price will be more expensive today, but it will not be expensive in the 5 year period. Secondly, Lining is the best government player in the domestic sports brand. Unlike most of his uncle's Jinjiang sports brands that do not hurt their grandmother's love, Lining has many ties with the government's sports system from the very beginning. From this point of view, Lining actually picked up the cheap ones. The veteran sports industry practitioner Qu Zheng told reporters.

However, it should be noted that according to the annual report of Li Ning Co, Li Ning Co's net profit last year was about 380 million yuan. If the number of sponsorship 400 million yuan per season is real, Li Ning Co must tighten its belts to pay CBA sponsorship fees.