Li Ning has pulled out of Hong Kong to focus on mainland China.

A Li Ning source, who declined to be named, confirmed the closure of its only Hong Kong store in Tsim Sha Tsui early this month. Opened in 2009, it has failed to meet profit expectations.

Li Ning is struggling to meet growing competition from rival global sportswear brands and has closed 1200 inefficient stores worldwide in the first half of this year. But its failure in Hong Kong will surely be a dent to corporate pride.

Zhang Qing, CEO of Key-solution Sports Consulting, says the closures are the result of the company’s overestimation of the potential of the sportswear market which led it to expand too fast.

“Domestic brands have been faced with increasing challenges to penetrate markets in Europe and the US where mainstream sportswear brands have established their presences for years,” said Qing.

Li Ning, whose profit plunged 84.9 per cent in the six months to June 30, said earlier that it will focus on the Chinese market as part of its go-forward plan – Three Stage Transformation Blueprint – with the main goal of achieving long-term profitability.

An analyst from Chongqing Sailsports Consulting considers the closures a wise decision as it is tough for Li Ning to gain ground overseas, where global brands like Nike and Adidas are more dominant.

GB