Jordan Sports was forced to start a second venture. Nike was behind the scenes?

Seeing that the listing funds have been raised, basketball players have come up with a big "hot pot", and Jordan Sports has been caught in a dilemma with the "flyers" against the court. This lawsuit has hampered the plan for the listing and sale of Jordan Sports. What makes Jordan Sports worries is that it has been painstakingly operating the “national brand” for twelve years. When the aura becomes bleak, can the company’s real body be as good as ever?

And on the other side of the globe, Michael Jordan, after 12 years of silence, suddenly jumped out of trouble at this time? Their own surnames, the names of their sons, were robbed into trademarks in varying degrees. When denounced infringement, is there any further rumors? The "flying man" lawsuit has allowed Jordan Sports to really taste the bitterness of the "flying man" reputation. If everyone feels sorry for Jordan Sports, they also begin to wonder: Why Jordan was silent for so long, until Jordan Sports is preparing At the time of listing, lawsuits were filed against the court. Is there any hidden secret behind the scenes?

Originally, channel networks focusing on low proportions of distributors and directly-operated stores need to be adjusted by the opportunity of listing and financing. When the brand encounters controversy and is affected by listing and issuance, the adjustment of the channel network is inevitable. All aspects of the problem are entangled. . This Fujian company, which once operated low-key, encountered a major test at the time of listing.

Before the IPO came "Jordan"

On November 25 last year, Jordan Sports passed the review of the Securities Regulatory Commission and will soon be listed on the Shanghai Stock Exchange to raise funds. However, good news may not have a good mood. The capital market is an open platform. Listed companies are also more concerned by the public. And Jordan Sports also put itself in a lot of right and wrong.

After the initial application for the meeting, the mood of Jordan Sports may have been hanging. Although Michael Jordan has never been identified in the past 12 years, although the “Jordan” trademark has already been registered, before the IPO, all the signs of the crisis were sensitive, not to mention a lawsuit affecting the vitality of the corporate brand!

Just like Murphy's Law, the most feared risks will eventually come. On February 23, 2012, Michael Jordan announced that he would sue Jordan Sports for allegedly infringing his right to his name. He demanded that the latter stop "infringement", clarify the company's relationship with itself, and demand compensation for moral damages. Jordan's accusations may have been anticipated by Jordan Sports. Its prospectus focused on "trade name and trademark risk," but the market did not expect that the risk would come so fast, ahead of the Jordan Sports IPO.

In Jinjiang, there are more than 40 companies listed on the global capital market. Among them, the sporting goods siblings are all listed overseas, and "Jordan" chose to list on the Shanghai Stock Exchange, becoming the only sporting goods company in the A-shares, and perhaps also avoiding the inconvenience of foreign capital market in the inconvenience of representation. After all, the Jordan brand is in With China's registration, many things are much more convenient in China.

Involving family members may be the direct cause of Michael Jordan’s anger. "I was very disappointed to use my Chinese name, shirt number 23, and even try to use my child's name to conduct business activities without my permission. The purpose of this action was to protect my name rights and brand names. ."

Among the trademarks registered by Jordan Sports, the names of Jeffrey Jordan, Marcus Jordan, JIEFULIQIAODAN, and MAKUSIQIAODAN are impressive. The word “Jordan” can still be interpreted as: The coincidence is the same as the surname of a person in Europe and the United States. However, these trademarks are the same as the English name and the Chinese transliteration name of both Sons of Michael Jordan. Jordan Sports is difficult to refute—the position of Jordan Sports. By evading this issue, he claimed that he had exclusive rights to registered trademarks such as "Jordan" and was protected by law.

Its prospectus also called its own word mark “Jordan” in Chinese characters or “Qiaodan” in phonetic letters, which are quite different from Nike’s “MICHAEL JORDAN” trademark registered in China. “They are independent and not possible in the consumer. There is confusion in the middle and there is no problem of infringement."

Michael Jordan submitted the lawsuit to the Beijing court, but Jordan Sports refused to accept the case of honorary infringement. The reason is that Jordan is not uniquely designated in China. Michael Jordan's "Jordan" is only a surname in the United States. There are thousands of people named Jordan. There is no specific reference to someone. Jordan's prosecution party believes that according to Chinese law, Michael has the right to pursue "mental compensation" and the court can make a corresponding decision. After being rejected, Jordan's prosecution again transferred to the Shanghai court for prosecution.

The second venture, change the name such as tool change

In the past 12 years, the development of Jordan Sports has also been smooth.

Jinjiang, Fujian Province, factories, all over the country, such as clouds, a county-level city occupied half of China's sporting goods. In the local 700 square kilometers of land, Jordan Sports shine is not dazzling - there are too many star companies: Anta, Peak, three six sixty-one, special steps, Kinba, Kanpai, Lilang ... ...

Before 2000, Jordan Sports had nothing to do with trapeze Jordan. In the early 1980s, a family workshop in Chenjing Town, Jinjiang made the first pair of sports shoes in Jinjiang. Then in 1984, the two fathers and sons of Chenshao Town took out 136,000 yuan to set up a factory and hang it under the name of the local village committee.

This was identified as a collective-owned enterprise. It has a brand name of its era: "Jinjiang Chenxi Creekside Commodity Factory No.2 in Fujian Province". This year, his son Ding Guoxiong was only 17 years old. Later he went to Beijing to open a store and sell sports shoes. The business gradually expanded from retail to wholesale. This year, the 21-year-old American basketball player Michael Jordan was selected by the Bulls as the third pick in the draft. A dynasty of the NBA was announced.

By the end of 1995, Ding Guoxiong had opened more than 10 retail stores in Beijing, as well as two wholesale stores. This year, Michael Jordan retired for more than a year and announced his return. Ding's father and son completed the accumulation of capital and experience. Michael Jordan began his second glory.

Ding father and son's strength is increasing. In June 2000, the company was restructured to become Jinjiang City Jordan Sporting Goods Co., Ltd. In 2009, the company was changed to a shareholding system and renamed Jordan Sports. In the NBA for 14 years flying Jordan Jordan has long been a world-renowned star. At this point, he retired as the manager of the Washington Wizards in the United States. He has no time to know that there is a brand in the distance that has the same name as his Chinese name.

Why should Ding's company use the word "Jordan" to name it? The influence of these two words in the hearts of Chinese fans is self-evident, and the intention of leveraging market promotion is obvious. The combination of production and sales is the characteristic that Ding's father and son had since starting the business. However, the development pressure of retail channels and the profitability of OEM production have limited the scale of business development.

Later, Ding's father and son's company began a qualitative change.

Brand, channel network, product design level, this is the three "barriers" of the sporting goods industry. Since then, Jordan Sports has had a high starting point in these three aspects.

Channel network, this is Ding Guoxiong director, but Jordan Sports decided to focus on dealers rather than direct-operated stores, through cooperation with distributors to expand the product's service network. The input costs of directly-operated stores are very high. Depending on the distributors across the country, Jordan Sports can obtain sufficient financial resources, manpower, and local market resources to quickly build channel networks throughout the country.

In terms of product design and production, Jordan Sports has its own production capabilities and only needs to take a step up in terms of design. In the case of Nike, Adi, Li Ning and other major brands using light asset operations, Jordan's strategy is to produce its own products, determine output through distributor orders, and then commission external production if necessary. This model is also common in the Jinjiang brand. This is also true for Anta and Xtep. It emphasizes product design and independent production.

Upstream product design and downstream channel network development are guaranteed. With the high-profile brands, the development of Jordan Sports is even more powerful.

Sales in the first half of 2011 were 1.7 billion yuan. At this time, there are 5,715 Jordan brand sports stores, covering 31 provinces, municipalities, and autonomous regions. It is already a company that compares with mainstream domestic sports brands.

Borrowed fame, dared not speak loudly

Despite claiming that he had nothing to do with Michael Jordan, in fact, there are actually many consumers who have chosen Jordan Sports’ products because of the “Michael” word and because of the basketball player’s logo design. . The "famous for the outside world," Jordan Sports, took the trademark protection registration, market segmentation and other means of dissemination, just to ensure that the brand's holding is justified.

At the source, Jordan Sports registered 131 trademarks in China, with Chinese characters, letters, and graphics, most of which are related to "Jordan." "Jordan" Chinese characters, Hanyu Pinyin, athletes dribbling graphics and other elements are on the list. There are also similar protective trademarks such as "Little Jordan," "Jordan King," "Qiaodan," and "Danqiao." They have not been used before. In 2010, the Ding family had just canceled a company called "Lakers Sports."

Moreover, the brand of Jordan Sports has been officially recognized and praised in many aspects, such as the “National Exempt Inspection Product”, “China Famous Brand Product” of the General Administration of Quality Supervision, Inspection and Quarantine, and “China Famous Brand” of the State Administration for Industry and Commerce.

Second, Jordan Sports tried to shape the meaning of another brand beyond the aura. The main method is to strengthen the alliance with the sports industry and strengthen the brand image of its professional sports. What is interesting is that Jordan Sports had brought out the national brand banner on some occasions, leaving him with a trail.

I must mention some of the operational ideas of the Jinjiang sporting goods brand. The companies here are often self-owned brands have three axe: name borrowing, celebrity endorsements, advertising bombing.

There are many brands that use the name Leverage. Similar to Nike are Peak, Meike, Fink, and Buick (3/16 predecessor); similar to Anta, Kangta, Rui Ta, Tadashi, New Tread, Steady Tread, and Jian; The celebrity halo brand Kobe Sports, Maradona Football, Yao Ming, Yi Jianlian, etc., of course, is also outstanding Jordan Sports. These are just a few examples.

The celebrity endorsement does not need to go into details. Since Anta invited Kong Linghui as the endorsement and market share soared in 1999, both small and large enterprises in Jinjiang have begun to look for celebrity spokespersons. The birds invited Liu Dehua, Meike asked Fu Mingxia, King Lake asked Wang Nan, Li Lang asked Chen Daoming ... but the brand with a celebrity aura has saved the investment in this area, it has a natural spokesperson.

Once, Jordan Sports invited Hu Bing and Jiao Jian as spokespersons, but gave up with its influence and development. In June 2011, Jordan Sports invited NBA star Hayes as spokesperson. A star forfeited by Li Ning, a public relations rush before the listing application before the meeting, under the eyes of the Americans, Jordan Sports is likely to have other intentions, trying to ask for directions, spying on the reaction of old Nike and Jordan - there is Risk, early release, early resolution.

As for advertising, it is necessary to know that CCTV 5 sets were once regarded as the "Jinjiang Channel," and advertisements for various leisure and sports brands have cropped up. At the most, one in every four advertisements is a company in Jinjiang. However, Jordan Sports was a "low-key" company before 2007. Because of the brand's "congenital visibility advantage", Jordan Sports has very little advertising investment, and it rarely appears in the media. Until 2008, Jordan Sports sponsored CCTV's basketball game broadcast for three consecutive years.

However, in terms of brand promotion, the advance and retreat of Jordan Sports is still somewhat embarrassing. If the low-key moves are made, the pressure on the competitors in the face of pressing pressure is huge, and the market is unstoppable. If the high-profile moves forward, it may expose the original face and lose the influence of “borrowing”.

Jordan Sports has also tried different brands of force points, such as focusing on specific groups of sports activities, "providing sports sports equipment for 14 to 29-year-old sportsmen with excellent value." Since 2007, it has sponsored a series of sports games for college students; from 2009 to 2010, it sponsored the Olympic Committees of Mongolia, Kazakhstan, and Turkmenistan. These sponsorships are a PR attempt by Jordan Sports at the forefront of sports.

Concerned, Jordan Sports also tried to improve the product design standards, improve the service quality of the terminal channel network, store image, and directly improve the brand image and reputation of Jordan Sports in the terminal market.

In the initial stage of eliminating the cost of large-scale celebrity endorsements and advertising, Jordan Sports has the ability to exert power in channel enclosures, product design, and organization and management, and rushes to make a fortune. Of course, the longer the better, the better. However, paper can't hold fire. Under the impetus of the situation, all kinds of facts are eventually presented intentionally or unintentionally.

Adjust the structure of the channel and the market is ready to go

The public release of the listing, Jordan Sports will certainly be under the eyes of the examination, Jordan's own hardship may also follow. However, regardless of the outcome, Jordan Sports too late to consider too much, because the channel network structure adjustment, capital flow optimization, so that listing matters are in full swing, had to send.

Once listed, channels, brands, and capital can produce powerful interactive effects. The strong can be stronger and the weak can stand up. For example, after Anta’s listing, the channel’s profitability was overwhelming, and after Hongxing’s listing, it changed its status as a saltwater player. Of course, there are many examples of failures: In the Wardrobe footwear industry listed in Canada, the Hongxing Wadeng Card listed in Korea is still borrowed from the unknown.

Since the financial crisis, the cost of labor and raw materials has risen, the capital chain has become tight, and the living environment has deteriorated. This is one of the major reasons for promoting the listing of companies. Many small and medium-sized enterprises in Jinjiang are already in a position of insolvency, relying on bank loans and private lending to support operations. Once a bank breaks loans, companies are struggling. According to media reports, Kobe Sports and Fujila Footwear have recently suffered a depletion.

However, for Jordan Sports, the listing has deeper meaning.

Out of 5715 stores, there are only 7 single outlets for Jordan Sports, and 147 direct counters for shopping malls. Li Ningguang owns nearly 500 outlets. Sales can be made more profitable through direct sales stores, and less profitable sales through resellers. Due to the embarrassing situation of the brand, the brand premium of Jordan Sports is naturally limited in space. Increasing the profit rate of a single store is the best way to increase income.

Moreover, the current inventory also puts pressure on Jordan Sports: inventory of 510 million yuan in the first half of 2011, this data is 380 million yuan at the end of 2010. Excess inventory will lead to decline in revenue on the one hand, and on the other hand directly lead to lack of funds for distributors. This will not only make the company's capital chain tight, but also make new products unable to be listed in time.

Originally, with the help of the dealer's financial resources, the capital flow of companies can be improved through deposits and payment settlement. However, due to the use of credit sales to dealers, this will generate hidden dangers in accounts receivable, in the case of heavy inventory problems, the dealer's cash flow will inevitably be affected, thereby affecting Jordan Sports' capital flow.

Jordan Sports accounts receivable accounted for liquidity ratio surged from 5.57% in 2008 to 33.29% in the first half of 2011, and account receivables greater than 90 days also increased significantly from 2010. The explanation of Jordan Sports is to support the distributors in order to expand the market, and to relieve the pressure on dealers by extending the account period and increasing the credit line, so as to open the market and seize more shares. This is a hidden investment of the company. Part. However, dealers are unable to pay back in time, resulting in the accumulation of payment arrears, and the company can not cut off these channels, they will have to continue blood transfusion, capital chain issues will follow.

Changing the sales model of reliance on dealers and increasing the proportion of directly-operated stores in the channel network is the best way for Jordan to break the development bottleneck. Moreover, direct sales stores are easier to control and manage than distributors, and are more conducive to the unification of brand communication.

This is exactly the original intention of Jordan Sports' listing application. Jordan Sports plans to raise funds of 1.06 billion yuan on the Shanghai Stock Exchange for investment in four projects including the expansion of shoe production bases and the construction of direct-operated stores. The strategy for the construction of directly-operated stores is to build 27 brand-strategic shops in the first-tier cities in China and use them as the center to spread the marketing network in the form of dealer retail stores in the periphery to form the business model that the center drives the sales network. Drive the overall sales performance of local and surrounding areas, and effectively implement management and monitoring of local retail stores.

Nike is behind the scenes?

The most direct effect of “infringement litigation” is that Jordan Sports may postpone its issuance. The relevant laws and regulations of the securities market stipulate that the issuer must be listed on the stock market "with no significant debt repayment risk, and there are no major contingent events such as guarantees, lawsuits, and arbitration that affect continuing operations." After the issuance of an issuance of an issuance of an issuance of an application for issuance and before the issuance of an issuance of stocks, the issuer shall suspend or suspend the issuance of a major event. Obviously, Jordan Sports has encountered similar troubles, and the probability of suspending issuance has greatly increased.

However, the greater damage is the brand of Jordan Sports. When consumers understand that the motivation for purchasing Jordan's sports products is only a “good misunderstanding”, Jordan Sports will inevitably bear the image of borrowing eggs and chicken eggs, and it also erects a barrier for overseas entry.

In the past 12 years, Jordan Sports has been playing steadily and advertising has hit the NBA. Jordan did not respond to this before, and many people wondered when the opportunity to launch a trapeze was very good, so that Jordan Sports, which was soon to be listed, was in the throat.

Some people have speculated that Nike is a big player who manipulates the stick and that its purpose is to prevent the listing of Jordan Sports, thereby weakening the opponent's threat to himself.

Nike has a long-term cooperative relationship with Michael Jordan. In 2002 and 2007, Nike had objected to Jordan Sports' application for the registration of eight defensive trademarks and was dismissed by the Trademark Review and Adjudication Board. The ruling at that time held that: "The athlete Michael Jordan has a certain reputation only in the field of basketball, but 'Jordan' is an ordinary British and American surname, and 'Jordan' does not have a unique correspondence with the athlete Michael Jordan."

It is an indisputable fact that Michael Jordan's influence in China is diverted. Nike's "Air Jordan" series has always been tepid in China. In 2004, Nike had operated "Jordan China" and promoted its "AirJordan" brand, which was also a counterattack to Jordan Sports' "spotlight" behavior. However, there have been many problems with Jordan's fans and products that cannot be sold simultaneously. The unsuccessful Jordan’s China trip was considered to have successfully “strengthened the impression of the 'Jordan' brand in Fujian in many consumers’ minds” and Nike has vainly squandered Jordan’s influence.

After so many years of entanglement, Nike certainly has an appetite to spread out, the current support Michael Jordan, to support his actions to safeguard personal rights. However, the spokesman for Jordan’s legal advisor denies that Nike was behind the scenes. Michael Jordan stressed that he has no intention of causing the closure of Jordan Sports. The only concern is that his name and identity rights are protected. Nike did not respond positively to this statement.

Until the time of writing, the Shanghai Second Intermediate People's Court has officially accepted the case concerning the dispute over the right of Michael Jordan v. Jordan Sports. If the investment institution determines that the court's final decision does not pose a real threat to the future development of Jordan Sports, then it can normalize the IPO and go public. Of course, in the short term, the damage to the brand image may have a more or less impact on the valuation and issue price of Jordan Sports.

However, in the long run, Jordan Sports apparently is reluctant to give up this borrowed reputation. In the past 12 years, Jordan Sports has invested billions and billions in direct and indirect brand building, and has also achieved fruitful results. 2011 sales of more than 3 billion yuan, more than 5,700 channels outlets! However, the congenital advantage has become a congenital flaw, and the brand has a hard time removing it.

Although the brand is leveraging on its position, it can't be held in the controversy. To erase the 12-year merit of Jordan Sports, it is also impossible to abandon the essence of commercial profit-seeking and ethically criticize commercial competition. It is important to know that law is the bottom line of business.