In August 23rd, Lining (HK.2331) announced its interim results. Its first half operating income decreased by 9.5% to 3 billion 880 million yuan compared with that of its shareholders. Net profit Crazy drop 85% is only 44 million yuan. In order to save costs, Lining closed 1200 stores in the first half of this year, and is expected to continue to close stores in the second half of the year. At the same time, the company issued an early warning of performance, saying that the annual profit may be "red."

At the beginning of this year, the US private equity fund TPG was invested in Lining. When Chief Executive Zhang Zhiyong left office in July, Kim Chun Jun, a partner of TPG, was appointed as executive director and executive vice chairman of Lining to join hands with Lining to reform. "This is a strategic adjustment," Jin Zhenjun revealed at a performance press conference. According to Jin, Li Ning Co is planning to solve the inventory problem once and for all.

　　 Annual loss is expected to reach 226 million.

Lining announcements revealed that in 1-6 months of this year, the sales revenue of the company's core brand Lining and its agents decreased. Lotto profit continued to lose to 100 million yuan, and the total operating profit of agent AIGLE, Kaisheng and Z-DO totaled 89 million 810 thousand yuan. In the first half of, the overall gross profit of Li Ning Co decreased from 47.3% in the previous year to 44.2% while the cost of staff increased from 9.6% to 9.6%.

In the first half of this year, Lining opened 248 new stores, made a profit assessment for the shops, and made structural adjustments, shutting down 1200 inefficient stores, which accounted for 15% of the shops. By June 30th, the number of shops in Lining regular stores, flagship stores, factory shops and discount stores was 7303, a decrease of 952 from the end of last year. Distributor After cutting 5, there were 52.

Lining will continue to shut down inefficient stores in the future. According to Jin Zhenjun, the number of stores in the second half of the year is less than that in the first half. But Lining's profitability is down, and Merrill Lynch Merrill expects the company's annual loss to be around 226 million yuan.

　　 Internal management team personnel adjustment

It is worth noting that Lining's inventory didn't improve in the first half of the year, and its average inventory turnover period increased from 72 days to 95 days. "Because of the early optimism about the future of the group and industry, and the accumulated inventory for several years, the inventory clearance efforts in the first half of the year are insufficient, and the company plans to solve the problem at once, so the annual profit forecast is adjusted." Jin Zhenjun said this is a strategic adjustment. At present, management is discussing whether it will buy back products from dealers.

By the end of June, Lining's clearance outlets had increased from 269 and 358 to 271 and 394, respectively. Zhong Yi Qi, executive director and chief financial officer of the company, said that the company will continue to solve inventory and accounts receivable problems in the future, providing 25% off for terminal retailers and 51% off for clearing channels. In 2013, the distributor guidance policy was introduced to reduce the wholesale discount rate. The overall discount rate is expected to be less than 1 percentage points. Merrill Lynch Merrill Lynch expects Lining business to improve in 2014, but until then, the company's sales and gross margins will continue to be under pressure, and there will be uncertainties in the progress of reform in a challenging environment.

In July of this year, Lining, former chief executive officer of Zhang Zhiyong, left. It is reported that the position of chief executive officer is still vacant. Lining said in his interim results conference that he has been looking for candidates for headhunting companies, hoping to find competent people. Jin Zhenjun added that he is not in a hurry to hire chief executive officer. Because he and Lining are pushing for enterprise reform at present, the two sides cooperate smoothly and can spend more time finding the best talents.

It is learnt that the future Lining On top of the team's top management list, an executive who is responsible for supply chain and procurement matters is coming from a high-tech company. He will bring Lining supply chain management experience. There will also be a new chief sales officer and chief product officer, all from the top sports Brand Company. In addition, a world-class designer will also join.