From Caixin:

On May 24, Li Ning announced the resignations of three senior executives – COO Guo Jianxin, Chief Marketing Officer Fang Shiwei, and Director of E-commerce Lin Li. A source blamed the exodus on the failed campaign.

That same day, Li Ning’s Hong Kong-listed shares declined 8.4 percent. The stock has continued losing ground ever since, falling to HK$ 13.38 on June 9, far below the past year’s peak of HK$ 29.35. The company’s market capitalization has declined more than HK$ 16.8 billion.

Third-quarter shoe and apparel orders fell 17 percent from a year earlier, and 6 percent from the previous quarter, the company said in April.

Li Ning managed to report a 1.1 billion yuan net profit for 2010. But it was badly beaten in the earnings race by major rival Anta Sports Products, which registered a 1.5 billion yuan net profit last year.

While Li Ning  trying to raise its profile in the North American market, companies like Anta, Peak and 361 Degrees have been catching up domestically in 2nd- and 3rd-tier cities. According to the Caixin piece, three main reasons contribute to Li Ning’s recent loss:

• Focusing too much on upscale professional sportswear and less on leisure-wears
• Closing of small dealerships in consolidation of sales channels
• A lack of production factories

The company's new logo announced last year

Li Ning has been found inconsistent in its business strategy and branding. “Sometimes it wants to get international, sometimes fashion and then sporty. Nobody can really tell what the brand has been trying to deliver all these years. It’s caught in the middle of the industry,” said someone close to the Li Ning management earlier this month to Jiangsu Business News (江苏商报).

With the “make the change” campaign launched last June, Li Ning turned its focus to more high-end product lineup and younger consumers, which have not been received well by the market. As a Beijing dealer quoted in the Caixin piece, people can afford Li Ning would simply “buy a top brand with a little more money.”

Links and sources:

• Caixin - Li Ning Loses Way after Wrong Business Turn
• Jiangsu Business News - Li Ning “capricious” facing the competition (Chinese)
• Time – Can China’s Big Shoe Brand Make Tracks in the U.S.?

Previously:

• Li Ning to Open First Store in the US
• Li Ning Signs 5-year Deal with Yelena Isinbayeva

The CBA All-Star Game, first sports event after the Wukesong Arena turned MasterCard Center

The awkwardness largely set the tone for the All-Star Game. It looked the organizers tried to reach the fans but failed for not trying enough. They have a beautiful stadium, the first NBA-style arena in China, and the All-Star Weekend is the first sports event after the Wukesong Sports Center reached the sponsorship deal with MasterCard. The fans at the MasterCard Center were excited in the beginning and mostly in the first two quarters. But some of them started to leave in the third and, by the end of the match, people around us were almost all gone. There’s something lost in-between and you feel the fans and the game were still disconnected.

They’re disconnected before entering the arena. No CBA merchandise or any related products were offered at the MasterCard Center except what you saw in the picture below. The products were cheap but the vendor said he actually had a great business in the Rookie Game Night on Saturday.

Unlicensed CBA posters, the best you can find in Wukesong. But are there licensed ones?

The opening was reminiscent of the Beijing Games when the rookies staged lip-syncing. And speaking of the rookies, they’re no better than the all stars in performance. The lack of talents made people started leaving after the 2nd quarter. I was told a majority of tickets on Saturday were given out free but can’t confirm if that’s true. The All-Star Game, as in previous seasons, were dominated by imported talents. And for last night it was more of a Quincy Douby vs.Stephon Marbury match. Most Chinese athletes seemed uninterested and somewhat out-of-place. It gave you the feeling that they’re not used to this idea of an All-Star Game or themselves participating in it, but many of them had at least 3+ years of playing in the All-Star.

It looks the CBA cares about its brand but does not know where to begin after 15 years of practices. It’s always easy to copy, but when the audience can taste the original flavor everyday at home, why buy the tickets to watch your games? The silver lining for the CBA guys’ that the stadium was half-full by the end of the 4th quarter. They got some fans, but not professional enough to keep them and make them happier.

The N.F.L., widely considered the most successful sports league in North America, will reduce its staff by about 150 employees after theSuper Bowl in response to the slumping economy, Commissioner Roger Goodell told staff members in a memo Tuesday.

The N.F.L. has a total of 1,100 employees at its New York headquarters, at NFL Films in New Jersey and at the Los Angeles offices of the NFL Network and NFL.com. Although voluntary buyouts are being offered now, the league will not determine the breakdown of cuts until after the championship game on Feb. 1.

Some franchises have started to trim their staffs, as well. The Denver Broncos made cuts earlier this year, and the New England Patriots recently laid off about 5 percent of the staff from Gillette Stadium — about two dozen people — in anticipation of reduced trade-show and special-event business there next year.

The Patriots also closed their one-person China office, which opened when the team was scheduled to play a game there. With the N.F.L. focusing its overseas plans on regular-season games in Europe, the China game has been canceled.

This is actually the second cancellation of the NFL China game this year. The 2008 game, which scheduled for August 9 between New England Patriots and Seattle Seahawks, was called off by NFL this April, with the reason that they wanted to concentrate their “global resources” on next October’s regular season game in London. 

NFL China has been concentrating on developing grassroots fans in local colleges by staging various events and also marketing themselves on TV and the Internet. Chinese fans can now watch games on CCTV and Shanghai TV, and a live game is also available once a week on Sina.com, a major Chinese web portal. 

We’re suprised by the Patriots’ pullback from Beijing. But it all makes sense when looking at a bigger picture, where Honda’s withdrawal from F1, MLB’s recent job cuts and Arena Football League’s possible suspension in 2009 are all considered. 

Related Reads:

• New York Times: Feeling Pinch, N.F.L. Will Cut About 150 Jobs
• LA Times: Arena Football League reconsiders suspending 2009 season

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