Li Ning hopes to make capital on Games
Sportswear firm Li Ning will increase the number of its stores in China to 5,000 in 2008 from about 3,300 at present, hoping to capitalise on the 2008 Beijing Olympics.
All of the company's revenue comes from sales of sports footwear, apparel and accessories at its stores in the mainland. Li Ning would expand the number of its stores to 4,000 next year and 4,500 in 2007, said chief executive Zhang Zhiyong. 'Our revenue growth is through three means - the number of our stores, the sales growth at each store, and brands.'
The company will open its own flagship stores in first-tier cities. However, Mr Zhang sees 'exponential growth' from opening franchised stores in second- and third-tier cities due to their rising consumer power. Most of Li Ning's stores are franchised.
Li Ning would be open to opportunities to partner international brands, said Mr Zhang.
In July, Li Ning formed a 50-50 joint venture with French brand Aigle with exclusive rights for 50 years to manufacture and sell Aigle brand sporting goods in China. Li Ning also disposed of its 80 per cent stake in sports brand Kappa for 44.8 million yuan that month.
For the first half, Li Ning's turnover rose 40 per cent to 1.1 billion yuan, while net profit soared 42.6 per cent to 78.3 million yuan.