New product lines seeing double-digit growth, says Li Ning CEO
The new product lines for Chinese sportswear brand Li Ning are seeing double-digit growth this year, its interim chief executive Jin Goon Kim said yesterday after the company's annual shareholders' meeting.
"The impact has been quite substantial. The growth of the new products has shown very good results, and is steadily increasing in the double digits," Kim said.
Earlier this year, the sports brand, founded by the Olympic champion gymnast of the same name, revamped its product mix to include sports shoes in three price tiers, ranging from 299 yuan (HK$370) to 399 yuan and 999 yuan.
Like many domestic sportswear players that were cash-rich after their listings, Li Ning expanded too quickly in the lead-up to the 2008 Beijing Olympics, and had been suffering from poorly differentiated products compared to foreign players like Nike and Adidas.
It had also ventured into the highly competitive space of fashion casual wear, which it has now exited.
Kim said the inventory situation had been "solved" and any remaining inventory would be cleared by the end of this year.
Suffering from bloated stock, the firm had to offer steep discounts of as much as 70 per cent to clear inventory.
Besides changing its products, the company is also engineering a shift from a wholesale business model to a more retail-oriented one, where the brand is dictated by the customer.
As a result, the number of stores fell from 8,255 in 2011 to 5,915.
Kim, who was brought on in 2012 to help turn the company around, has experience with many business transformations under his belt, including helping footwear company Daphne International evolve into a fast retail operation.
Li Ning still had yet to find a permanent chief executive, management said.
Shares in the company yesterday jumped 5.41 per cent, ending at HK$5.46, while the Hang Seng Index rose 0.31 per cent.