Thanks to a health boom on the mainland, Chinese sportswear brand Li Ning has skipped out of the red to turn a modest profit after three years of losses.
For its latest financial year, it had a net profit of Rmb14 million (US$2.2 million), reversing from a Rmb781 million loss in 2014. Revenue grew 17 per cent to nearly Rmb7.1 billion.
Over the past three years, the brand has restructured, shedding 20 per cent of its inventory, closing thousands of underperforming stores and adding more than 300 directly run outlets. It also increased its eCommerce inventory.
In a filing with the Hong Kong stock exchange, Li Ning says retail, wholesale and eCommerce outlets all achieved double-digit revenue growth last year.
“Supportive national policies stood the sportswear industry in good stead,” says the company. “The initiative to lead an eco-friendly life has deeply implanted the idea of pursuing a healthy lifestyle in the hearts of people.”
Li Ning is backed by private equity group TPG Capital and Singapore sovereign wealth fund GIC. The company was founded by Chinese gymnast Li Ning, who won three gold, two silver and one bronze medal at the Olympic Games in Los Angeles in 1984. Following his retirement, he set up the company in 1990, selling footwear, apparel, accessories and equipment for sport and leisure.
