Li Ning’s apparel sector lifts H1 revenue
Chinese sportswear maker Li Ning Co Ltd has placed its confidence in its apparel business, which boosted the company’s half-year revenue and helped it stand out amid fierce market competition.
Chairman Li Ning said at a media briefing on Monday that he expected the “China LI-NING” series of sportswear products, which were released at the New York and Paris fashion weeks, to be a new source of the company’s revenue.
Revenue from the apparel business rose 30.7 percent year-on-year in the first six months of the year, accounting for the bulk of the company’s total revenue, the sportswear brand reported.
The substantial growth is mainly due to the low base of the apparel business in the past, as Li Ning did not focus on this division before, said Terence Tsang Wah-fung, the company’s chief financial officer.
He believed the apparel division would continue to grow in the future at a slower speed, but the proportion of apparel in total revenue would remain at the same level.
The sports brand impressed fashionistas with its innovative designs at its debut at the New York Fashion Week in February, and more “China LI-NING” series products continued to raise the profile of the brand at the following Paris Fashion Week, Li said.
The effect of the series’ rising exposure has been fully reflected on the company’s financial performance.
The company posted a 42 percent surge in net profit in the first half of this year to 268.57 million yuan ($39.4 million), beating market estimates with a better-than-expected performance. Total revenue reached 4.71 billion yuan, a 17.9 percent rise year-on-year.
Its e-commerce business continued to expand and increased its proportion of the company’s total revenue to 20.8 percent, a rise of 2.6 percentage points. In order to help consumers purchase related products after event marketing such as the two fashion week campaigns, the brand has launched a WeChat platform providing a more convenient online channel.
In offline retail, Li Ning has closed down more than 300 outlets on the Chinese mainland in the first half of this year, about 40 of which were directly-operated outlets.
Tsang said the company would close 500 outlets by the end of this year and meanwhile keep opening more big outlets to improve efficiency. He predicted the total number of outlets will see a net increase of 50 to 100 this year.
Shares of Li Ning climbed 4.68 percent to HK$8.50 ($1.08) per share on Monday after the company reported its interim results.