Li Ning Co. Ltd. (02331.HK) has seen its losses widen in the first half this year, a development that suggests that the sportswear firm will take two more years to complete its revamp, the Hong Kong Economic Journal reported Friday.
The Chinese firm announced Thursday a net loss of 586 million yuan (US$95.23 million) for the six months to June, compared with a loss of 184 million yuan in the same period last year. The company attributed the wider loss to increased marketing and administration expenses and higher provision for bad debts and inventories.
Li Ning has been replaced by rival ANTA Sports Products Ltd. (02020.HK) in sponsorship of the national gymnastics team. Chairman Li Ning said the company opted to forego the sponsorship as it wanted to focus its resources on organizational revamp and product development.
The sportswear maker is expanding its new product line, which contributed 78 percent of the firm’s total first-half sales, up 20 percent from a year ago.
It is currently in the third phase of stock clearance while cutting franchisees and extending the network of self-managed stores that are expected to generate profit after six to 12 months of operation.
Li Ning’s poor financial performance reflects its weakness in product branding and poor competitiveness, some investors were quoted as saying.
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