TPG-backed Li Ning posts first half loss

Sales in the period fell 24.6% to RMB2.91 billion from the same period a year earlier, according to a regulatory filing. The company lost RMB1.98 billion ($323 million) last year.

"We have achieved what we set out for the first phase of the transformation plan and believe the company has turned the corner, underpinned by meaningful improvements in many aspects of our operations," said Jin-Goon Kim, executive vice chairman of Li Ning. "Although the group's financial results have not yet fully reflected the benefits from the investment we've made, we are pleased with the achievements of our channel revival plan, as a majority of our distributors are seeing improved cash flow and productivity. I'm pleased to say that we believe the worst is behind us."

Kim, a TPG executive who previously turned around Chinese women's shoe retailer Daphne, was appointed to be executive vice chairman in Li Ning in July last year. The private equity firm invested RMB550 million in 2009.

The sportswear company, which so far operates 6,024 outlets across China, has struggled in recent years after a failed attempt to reposition the brand and challenge the likes of Nike and Adidas. The company has since lost market share to local rivals in second- and third-tier markets as well as trailing Nike and Adidas in top-tier locations.

The company said it will continue to rationalize the sales network to achieve a healthier store mix in keeping with its transforming business model.

Earlier in April, Li Ning closed a convertible securities issue worth HK$1.85 billion ($238 million). Existing investors Viva China, TPG Capital and GIC will hold approximately 26.1%, 5.6%, 4.3% in the company respectively on a fully diluted base if all convertible securities are converted into shares in full.

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• Topics
• Greater China
• Consumer
• China
• TPG Capital
• GIC Private
• Consumer