Li Ning in profit warning as sales slump

CHINA: Li Ning in profit warning as sales slump

By Richard Woodard | 12 June 2012

Sportswear brand Li Ning says full-year profits in 2012 are set for a “substantial decline” as sales continue to fall, with apparel orders down by as much as 20%.

The Chinese business said trade fair orders from 2012 would be down in the high single digits in percentage terms, with the situation deteriorating in the fourth quarter, which showed a high teens decline.

“Throughout this year, competition within the sporting goods industry has intensified, discount promoting efforts have further increased and the pressure of inventory clearance at the retail level remains strong,” the company said.

“Despite taking an early initiative in implementing a series of reforms at the retail level, the group is still affected by the unfavourable market conditions, and the effects of the reforms have yet to emerge.”

Meanwhile, Li Ning announced that it had signed up to be equipment sponsor of the Chinese Basketball Association (CBA) for the following five seasons, describing the move as an “important strategic choice” and signalling that it will further develop its basketball business in the future.

Sectors: Apparel, Finance