From Caixin:

On May 24, Li Ning announced the resignations of three senior executives – COO Guo Jianxin, Chief Marketing Officer Fang Shiwei, and Director of E-commerce Lin Li. A source blamed the exodus on the failed campaign.

That same day, Li Ning’s Hong Kong-listed shares declined 8.4 percent. The stock has continued losing ground ever since, falling to HK$ 13.38 on June 9, far below the past year’s peak of HK$ 29.35. The company’s market capitalization has declined more than HK$ 16.8 billion.

Third-quarter shoe and apparel orders fell 17 percent from a year earlier, and 6 percent from the previous quarter, the company said in April.

Li Ning managed to report a 1.1 billion yuan net profit for 2010. But it was badly beaten in the earnings race by major rival Anta Sports Products, which registered a 1.5 billion yuan net profit last year.

While Li Ning  trying to raise its profile in the North American market, companies like Anta, Peak and 361 Degrees have been catching up domestically in 2nd- and 3rd-tier cities. According to the Caixin piece, three main reasons contribute to Li Ning’s recent loss:

• Focusing too much on upscale professional sportswear and less on leisure-wears
• Closing of small dealerships in consolidation of sales channels
• A lack of production factories

The company's new logo announced last year

Li Ning has been found inconsistent in its business strategy and branding. “Sometimes it wants to get international, sometimes fashion and then sporty. Nobody can really tell what the brand has been trying to deliver all these years. It’s caught in the middle of the industry,” said someone close to the Li Ning management earlier this month to Jiangsu Business News (江苏商报).

With the “make the change” campaign launched last June, Li Ning turned its focus to more high-end product lineup and younger consumers, which have not been received well by the market. As a Beijing dealer quoted in the Caixin piece, people can afford Li Ning would simply “buy a top brand with a little more money.”

Links and sources:

• Caixin - Li Ning Loses Way after Wrong Business Turn
• Jiangsu Business News - Li Ning “capricious” facing the competition (Chinese)
• Time – Can China’s Big Shoe Brand Make Tracks in the U.S.?

Previously:

• Li Ning to Open First Store in the US
• Li Ning Signs 5-year Deal with Yelena Isinbayeva

ANTA Sports Products Limited, the Fujian-based Chinese sportswear maker, signed a deal on Jan 18 with the top ranked female tennis player “JJ” Jelena Jankovic. The historic deal clearly marks the company’s ambition to go global, a very good branding move especially compared with Li Ning, who last year signed a two-year contract with the third-tier NBA player Damon Jones, the then Cleveland Cavaliers’ guard now playing for Milwaukee Bucks.

Jelena previously collaborated with Reebok before penned the deal with the Chinese company. Famous for her explosive forehands and powerful straight backhands, the Serb had a taste in No.1 for WTA on 11 August, 2008. With a record of 65 wins and 19 losses in the season of 2008, Jelena is the 18th WTA tennis player who ranked the first in women’s single, and she has become world No. 1 women’s tennis player since 6 October, 2008.

“The recent success of the Beijing Olympics has firmly established China’s reputation as a world power in sport. I feel very honored to be forming a partnership with the leading Chinese sports brand ANTA. I am delighted with the JJ range of products we have developed and I look forward to working with ANTA to promote the development of tennis and the ANTA brand world-wide,” Jelena said to the AFP.

Under the contract,  ANTA Sports will work with top designers from the US and Japan to tailor-make a range of professional sportswear and apparel for Jelena. In addition, the company will be launching a series of products including footwear, apparel and accessories named as “Jelena Jankovic series”. Jelena will be wearing ANTA gear in the Australian Open 2009, from Jan 19 to Feb 1.

About ANTA Sports Products Limited:

As one of the leading branded sportswear enterprises in China, ANTA Sports Products Limited primarily designs, develops, manufactures and markets sportswear, including sports footwear, apparel and accessory. The Group has established extensive distribution network and nationwide retail outlets in China under the management of the distributors.

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