Orders fall at Li Ning
Chinese sportswear brand Li Ning has issued a profit warning for 2012. Reports of weaker sales and higher costs coupled with domestic and overseas competition caused share prices to fall to a six-year low on June 11.
The domestic sportswear sector's growth rate was 13% in 2011 compared with 20% in 2010, and further declines are expected this year.
Meanwhile, with trade fair sales completed for 2012, the company is expecting orders for the full year to show a high single-digit percentage decline compared with trade fair orders last year. Clothing orders are expected to fall more than 20%, while footwear orders are likely to see a low teens decrease.
"Competition within the sporting goods industry has intensified, discount promotion efforts have further increased and the pressure of inventory clearance at the retail level remains strong," the company said.
"During this year and next year, the group will strive to
clear out inventory at the retail level, streamline the retail store network,
control the pace of new store openings, close inefficient stores and improve
retail efficiency."
