UNIQLO Business Model Is Not The Only Time.

In March 27th, Lining announced the 2019 earnings report. The share price rose by 13.22%.

In 2019, Lining's revenue was 13 billion 900 million, an increase of 32%; net profit was 1 billion 500 million, doubling over the same period last year. Profit growth is higher than revenue growth is behind the improvement of business efficiency - gross margin increased by 1 percentage points, inventory turnover days to 68 days.

In the five years since Lining's return, from 2015 to 2019, Lining's revenue doubled and its net profit increased by more than 100 times.

In September 2019, Lining paid 10 million annual salary to former UNIQLO executive Takasaka Takeshi as CO CEO. The two division is clear, Takasaka Takeshi is in charge of group operation, and Lining is in charge of personnel, finance and strategic direction.

After five years of killing and leading the Li Ning Co out of the mire of loss, can 57 year old Lining take a break?

The two figure of million salary

Not long ago, in the 2019 performance press conference, Lining's new joint CEO Takasaka Takeshi was pushed to the front desk.

This is the first public speech since he joined Lining. His last job was CEO, the Korean branch of UNIQLO.

Takasaka Takeshi, a Japanese Chinese, originally named Qian Wei, was born in Shaanxi after "70 years". He went to Japan when he was less than 20 years old. Takasaka Takeshi has worked in UNIQLO for 23 years, and has gone through the stores, production and management. He has rich experience in the field of clothing retailing.

　 Lining joint CEO Takasaka Takeshi

In 1996, Takasaka Takeshi, 25, graduated from university and entered UNIQLO as an ordinary shop assistant. A year later, he became a store manager, and he was rated as an excellent store manager in half a year. It wasn't long before it was transferred to production management.

At that time, the launch of UNIQLO's fleece was selling well, and it sold 26 million pieces in 2000. Takasaka Takeshi is one of them. He recalled that at that time, it was hard to find the materials for producing Chinese fleece. He led a team of 8-9 people from Qingdao, China to the north of Fujian and Guangdong, to collect raw materials and make up for demand.

This tenacity has promoted Takasaka Takeshi all the way. He was transferred to Shanghai in 2001 to prepare UNIQLO's first store in China.

UNIQLO did not go well in China in the first few years. In 2005, the adjustment strategy was aimed at the middle class and opened up large stores. At this point, Takasaka Takeshi has become COO of China UNIQLO (chief operating officer).

In 2010, Takasaka Takeshi was transferred to Taiwan, China, to become CEO of UNIQLO.

In 2012, Takasaka Takeshi returned to the mainland and took charge of UNIQLO. Every 3 days, a new store was expanding at a high speed.

Takasaka Takeshi attaches great importance to operational efficiency. After visiting a new store, he said that he only saw that management did not see the business. "There are too many deficiencies in store, layout, display or peddling. The store can increase its turnover by at least 20%. "

In 2017, Takasaka Takeshi was transferred to CEO, UNIQLO, Korea. At that time, Korea was the second largest overseas market after China.

In April 2019, Takasaka Takeshi left office in CEO, UNIQLO, and announced 5 months later to join Lining.

Takasaka Takeshi has the ability to open up new markets, which is a key factor that he was chosen by Lining.

　 The secret of Lining's growth

Takasaka Takeshi said that affected by the shutdown of the epidemic shops, Lining's performance was greatly affected in February this year, and the specific loss remains to be seen. However, he said that 95% of the stores under the current line have been resumed, and through "full staff selling" and "controlling inventory", "the annual profit margin in 2020 will continue to grow, with a target of 10%-10.5%".

The rapid repair capability during the epidemic was built on the basis of Lining's five years.

From the 2019 earnings report, Li Ningzheng is in a steady upward stage, and business efficiency has been improving.

In 2019, Lining's retail sales grew by 20%-30% compared with the same period last year. The growth rate of the electricity supplier exceeded 40%, and the electricity supplier accounted for 24% of the total revenue.

At the same time, Li Ning Co's gross margin level has been improving, from 45% in 2015 to 49.1%.

The explanation given by Lining is that it has reduced the sales discounts of various channels and the improvement of inventory handling capacity. Since 2014, the stock turnover days of Lining have dropped from 109 days to 68 days, cutting nearly 40%.

The fundamental reason for the improvement of business efficiency is the optimization and upgrading of supply chain. Since 2018, Lining has replaced the original one-off shopping mode by segmented production and evergreen rolling scrolling to reduce inventory backlog.

By December 2019, 76% of the inventories were new products in 6 months, and the sales turnover rate improved by more than 4 percentage points in 6 months.

While practicing internal strength, Lining's brand power has also been improved through a series of marketing behaviors that are closely related to the trend.

In February 2018, New York fashion Sunday cat China day, "China Lining" for the first time on the stage of fashion week. After that, it took turns to punch New York and Paris, becoming regular customers of fashion week, playing the "sports fashion" brand.

　 Lining in Fashion Week

In December of last year, the "Macao Lining" store opened in Venice, China, and it ran for more than 2 million 800 thousand yuan in three weeks, far higher than ordinary stores.

It is reported that the product line of "China Lining" has been established for more than two years, and its revenue accounts for 5% of the total. By the end of 2019, "China Lining" had 120 stores nationwide, and plans to increase to 170-200 in 2020.

Tmall apparel staff once told the "Internet developers of the world": since 2018, fans in Lining's fans have increased significantly after "90s" and "after 95" fans. Many fans of Nike and Adidas turned to Lining. Lining Tmall flagship store has 17 million 570 thousand fans, second only to Adidas and Nike, which is about 3000000 higher than Anta.

In 2019, Lining's net profit margin was 10.8%, which gave Takasaka Takeshi the confidence to lead Lining forward.

What will Takasaka Takeshi bring to Lining?

Takasaka Takeshi said that his next priority is to help Lining improve the efficiency of a single store. "We need to build an efficient and profitable" muscle management system "instead of only looking for a" fat enterprise "with a large scale and neglecting profit efficiency.

Judging from the current measures, Takasaka Takeshi is moving the set of UNIQLO operation to Lining.

In half a year, Takasaka Takeshi designed a set of guidelines for efficiency improvement for Lining, which is very detailed, covering all aspects of store operation, inventory digestion and staff training. It is reported that Li Ning Co has begun to implement a single store order mode, the commodity sales management system has been refined to color and size, and has also improved the promotion system of shop assistants.

UNIQLO refines the management of goods to color and size. The frequency of stores' price reduction is based on "weekly", which is constantly adjusted according to sales data until sold out. So UNIQLO can basically have no tail cargo.

However, the model verified in UNIQLO China may not be entirely applicable to Lining. For example, unlike UNIQLO, there are more than 5000 franchisees under the Lining line, contributing nearly half of the sales revenue.

How to improve the efficiency of dealer stores, this retail problem is a big challenge for Takasaka Takeshi.