Sportswear retailer Li Ning faces harsh winter
Excessive inventory, management reshuffle and founder's plan to sell stake mean a harsh winter is in store for the mainland sportswear retailer
On a weekday this month at Huawei Centre, a popular shopping spot in Beijing's Xidan shopping district, sales assistants at a Li Ning shop are removing cotton-padded overcoats and down-filled garments from cartons and arranging them for sale. The range is not from the new winter collection, but is goods left over from last year.
A salesgirl said the shop had been selling the new collections at full price, but about a week ago, the retailer turned it into "a discount store" to dump off-season products marked down by as much as 70 per cent. Some items were produced two years ago.
In another Li Ning shop in Joy City, another popular centre in Xidan, the retailer is trying to offload off-season inventory by mixing coats and shoes from last winter with the new arrivals. Two of the four fitting rooms are filled with boxes containing old and new sport shoes.
By contrast, the two global sportswear brands, Nike and Adidas, are not offering discounts and most goods are from the latest collections.
Excessive inventory is a major problem for mainland sportswear, which cooled quickly following an overexpansion before the Olympics in 2008. The problem has worsened in the past two years because of weak consumption and cutthroat competition.
However, the crisis at Li Ning is even harsher than for others.