China's Li Ning says sales network expansion to cause deeper 1H loss
SINGAPORE, July 17
SINGAPORE, July 17 (Reuters) - Chinese sportswear maker Li Ning Co Ltd on Thursday said it expects one-off charges and the cost of expanding its direct sales network to widen its January-June net loss to at least 550 million yuan ($88.66 million).
Li Ning, whose investors include U.S. private equity firm TPG Capital Management LP and Singapore sovereign wealth fund GIC Pte Ltd, posted a net loss of 184.2 million yuan in the first half of 2013.
"The group is in the process of transforming from a traditional wholesale model to a retail-oriented model to meet the demands of the increasingly sophisticated consumers in China," Executive Chairman Li Ning said in a stock exchange filing.
"The direct retail platform in which the group has been investing is also building a foundation for increasing retail's contribution to the group's revenue in future," Li said.
Operating performance will likely improve, Li also said without detailing specifics such as a time frame.
Li Ning, whose competitors include ANTA Sports Products Ltd and foreign makers such as Nike Inc, in March said restructuring would "take time to reflect fully" in its financial results.
Li Ning is scheduled to announce first-half earnings in mid-August.
($1 = 6.2033 Chinese Yuan) (Reporting by Donny Kwok; Editing by Christopher Cushing)