Li Ning H1 revenue down by 24.6 percent

REPORT_ Li Ning Company in its results for the six months

ended 30 June 2013 said that its revenue on year-on-year basis decreased by 24.6 percent, whereas gross margin increased slightly to 43.6 percent from 43.2 percent last year. Gross profits declined by 24 percent. The Board of Directors has not declared an interim dividend for the six months ended 30 June 2013 considering current operating conditions.

Li Ning, Founder and Executive Chairman of the Group, commented saying, “China's sports industry faces challenges including the hangover from over-expansion, competition from casual wear and the need to meet the more sophisticated consumer tastes of rising China. The market is currently choked with undifferentiated local brand products. As a leading sportswear brand with unique sportsmanship heritage, we think that taking a bold and differentiated strategy is the winning plan.”

Li Ning Company continued to address earlier over-expansion through right-sizing its sales network and closed approximately 400 underperforming stores, while opening high-performing store formats operated directly by the group and in partnership with top distributors. As at the end of 30 June 2013, the group had 6,024 stores.

Based on the success of the initial phase of the transformation plan, the group will continue to implement its strategic plan to create an industry-leading platform with a sports marketing-driven, retail-oriented business model. In the second half of 2013, the group expects to begin seeing returns from the investments made in 2012 and first half of 2013 to lift its financial performance, and anticipates cash flow to continue to improve.