Li Ning reported orders for the first quarter of fiscal 2011 were ahead 12%. That marks a deceleration compared to a 20% rise for the third and fourth quarters of fiscal 2010. For footwear products, the average retail price increased by over 7%, while volume increased by more than 5%. The average retail price of apparel products increased by over 11%, while order volume increased by about 1%.
The Chinese athletics giant said that for the first time it held separate fairs for the distributors from northern, eastern and southern regions to better accommodate preferences and needs of local distributors and consumers, and hence further enhancing order efficiency.
In addition, the Group concluded the LI-NING Kids Collection Trade Fair for the first half of the financial year 2011. Total order value, based on tagged retail prices, increased 240% year on year, reaching RMB 156 million (U.S. $23 million). The growth was significantly stronger than expected with overwhelming responses from distributors. Currently, the LI-NING Kids Collection business is conducted through licensing. The license fee is booked as “other income” in the Group's accounts.
“The results of this Trade Fair were in line with the management's projections,” Zhang Zhiyong, CEO of Li Ning, said. “Nevertheless, challenges remain in the sporting goods industry in the near term with intensifying competition and lingering discrepancy between sell-in and sell-through, prompting aggressive discounting at the retail level. Our independent distributors are under certain pressure in this environment.
As part of an effort to establish itself in the U.S., Li Ling opened a Portland, Ore., showroom in January of this year and reached agreements in August with Champs Sports and Eastbay, divisions of Foot Locker Inc., to sell Li Ning shoes in the U.S. The company also signed a multi-million dollar sponsorship deal with Evan Turner, the No. 2 pick in the recent NBA draft by the Philadelphia 76ers. Li Ning already has endorsement deals with Shaquille O'Neal, Baron Davis, and last year's second overall pick Hasheem Thabeet.