De-inventory still primary goal of Li Ning Company this year (China)

The Olympic Year comes again, but the situation of Li Ning's operation is much harder than the year of Beijing Olympics. Recently Li Ning company said, de-inventory is still the primary goal of this year. Li Ning company does not want to increase stock pressure to its retail end. Looking at current situation, operating conditions of the retail side are still not ideal, de-inventory is ongoing, but the speed may be lower than company's original target.

Li Ning Company Limited announced on June 12 that its data show its orders for 2012 full-year have declined, total orders has recorded a decline of double-digit percentage, coupled with other factors such as significantly increased promotion expenses in the next few years, its net profits in the first half of 2012 as well as the full year will substantially decline year on year.

Among them, order amount of footwear products have dropped in double-digit year on year, order value of apparel products has reduced by over 20 percent year on year, total order amount will witness a high double-digit decline in 2012.

So far, among the five mainland sporting goods companies listed in Hong Kong, Li Ning's net profit has been at the last place.

Li Ning Group announced to invest 3 billion Yuan to repurchase its stock from retail channel in 2011.　Now Li Ning Group has about 129 dealers and over 2000 distributors in its retail channel. About 1700 distributors operate just one store on average, so their efficiency is inferior. In accordance with Li Ning's plan, the integration of its dealers will be quickened to about five or six hundred units per year.

Li Ning Company's net profit dropped 65.2 percent in 2011 full-year, while revenue fell 5.8 percent to 8.929 billion Yuan.