Chinese sportswear giant Li Ning has returned to profit after three years of losses, the company said on Wednesday.
Net Profit attributable to equity holders rose CNY795 million (USD122.6m) to CNY14m from loss of CNY781m for the year ended on 31 December 2015. Revenue grew 17 percent to CNY7,09 billion.
Retail, wholesale and e-commerce all recorded double-digit revenue growth. Same Store Sales Growth (SSSG) for overall platform recorded high-single-digit for full year.
The sportswear maker attributed its improved performance to the supportive national policies and consumers’ growing demand of pursuing a healthy lifestyle.
During the year Li Ning continued to sell off-season inventories through its factory stores, general discount stores, temporary bargains stores, e-commerce and channels outside its system. As a result, gross inventory dropped 20 percent despite of a net addition of 313 direct Points-of-Sale (POS).
The e-commerce division of Li Ning showed a stellar growth due to its efforts in improving the overall operations, merchandise allocation planning and quick-response capability accommodating market changes reflected online. Revenue of the e-commerce division surged 95 percent year-on-year.
On Singles Day 11 November 2015, one of China’s biggest retail spending date, the sales of Li Ning brand on the entire network exceeded CNY200 million (USD30.8m), the company said in a filing to the Hong Kong stock exchange. The daily sales of a single store on the entire network ranked third among the sports industry while ranking top among all domestic brands.
The sport brand expects the growth to continue in 2016 and plans to invest in various emerging initiatives including digital operation, breakthrough businesses and rapid supply chain for further breakthrough.
It has established a strategic cooperation agreement with JingDong (JD.com), China’s largest online direct sales company, in order to optimize it inventory and operational efficiency. Under the partnership, JingDong will provide a one-stop logistic solution from product level to POS level for individual pilot regions chosen by Li Ning at the preliminary stage.
By the end of 2015, Li Ning added 507 POS which brought the total number to 6,133. It plans to add a net of 300 to 500 POS in 2016.
(Source: Yoko Wang)