The accounts receivable of Jordan Sports have risen sharply, raising concerns about its financial health. Date: 2014-06-25 09:17 Before the restart of its IPO, Jordan Sports and its sister company, Birds, were both seen as top contenders in the 2014 IPO race, drawing significant market attention. Guiren Bird Co., Ltd. successfully listed on the A-share market on January 24, 2014, while Jordan Sports remained in the running, aiming to become the second major sports apparel brand to enter the domestic stock exchange. In the recent wave of new share offerings, Noble Bird hit a low of 10.51 yuan on April 28, falling below its issue price of 10.60 yuan and becoming the first new stock to break. In contrast, Jordan Sports managed to secure a successful issuance, but the question remains: can it avoid the same fate and meet its fundraising target of 1.064 billion yuan? A major obstacle for Jordan Sports is the ongoing legal dispute over its brand name. The controversy began in 2012 when Michael Jordan, the NBA legend, sued the company for unauthorized use of his name and image. He claimed that the company used his name, jersey number 23, and even his child’s name without permission, which he argued was an attempt to capitalize on his brand. Jordan Sports’ prospectus highlights trademark risks as its top concern. The company claims to hold exclusive rights to the “Jordan” and “Qiaodan” trademarks, stating that these are distinct from Nike's "Michael Jordan" trademark in China. However, the company has registered several other trademarks, including names like Jeffrey Jordan, Marcus Jordan, JIEFULIQIAODAN, and MAKUSIQIAODAN—names that closely resemble those of Michael Jordan’s sons. Despite these claims, the legal battle continued. In 2013, Jordan Sports filed a lawsuit against the NBA star, accusing him of malicious litigation. Both sides stood by their positions, adding uncertainty to the company’s IPO prospects. The impact of the lawsuit is clear: the delay in the IPO could be significant. Meanwhile, the broader sports apparel industry is facing a downturn. After years of rapid growth, many domestic brands are now struggling with declining sales and inventory issues. Jordan Sports primarily operates through a dealer model, which allows it to receive payments upfront, ensuring steady cash flow. However, it also offers credit to dealers, enabling them to purchase goods within certain limits. This practice, while beneficial, has led to a sharp increase in accounts receivable. As of June 30, 2011, accounts receivable accounted for 33.29% of current assets, a significant rise compared to previous years. To address these challenges, Jordan Sports plans to raise 1.06 billion yuan on the Shanghai Stock Exchange. The funds will be used for expanding production facilities, building direct-operated stores, and strengthening its retail network. The strategy involves opening 27 strategic stores in first-tier cities, serving as hubs to expand into surrounding areas through dealer networks. This approach aims to improve sales performance and better manage retail operations. With the industry in decline and legal hurdles still unresolved, Jordan Sports must focus on brand development, reducing inventory, and investing in innovation. These steps will be crucial for its long-term success and ability to compete in a challenging market.

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