Li Ning’s profit soars on turnaround strategy
Li Ning’s profit in the first half soared 42 per cent as the sportswear brand’s long-term restructure continues to pay dividends.
Gross profit margin grew a full percentage point from 4.7 to 5.7 per cent and sales rose 17.9 per cent to RMB4.713 billion. Net profit rose 42 per cent to RMB269 million.
In an earnings statement, Li Ning executive chairman and interim CEO, Li Ning himself, said the Mainland China sports market continued to grow steadily, driven by favourable national policies, which in turn drove sales of sportswear.
“The company continued to focus on creating and enhancing Li-Ning’s experience value, including sport experience, product experience and shopping experience, and improving online and offline sales efficiency through a digitalisation strategy to cater to the [increasingly] explicit and mature consumer demands.”
Digitalisation also enabled the company to take its brand closer to the young consumer groups, stay abreast of trending topics and offer a flexible and diversified interactive experience, thereby consolidating its brand image and value, he said.
Li-Ning has been driving a strategy of growth based on three major pillars: enhanced products, more channels and improved retail capability.
“Professional sports remained the main theme and positioning of the branded products. Our innate sports DNA has impelled us to place more emphasis on sports research and investment in product research and development to constantly launch new professional products for athletes and sports enthusiasts,” said Li Ning.
“Imagination is driving Li-Ning brand to be more fashionable and trendy.”
Meanwhile, the company continues to close loss-making stores and renovate inefficient ones, at the same time as expanding its sales network to reach more customers.
“We have segmented high- and low-end markets based on the regional difference of consumer demands, providing versatile and diverse sports experiences and shopping experiences [for] different sports categories,” he said.