China sportswear firm Li Ning says H1 loss widens on charges for new stores
HONG KONG Aug 14 (Reuters) - Chinese sportswear maker Li Ning Co Ltd said it made a first-half net loss of nearly $100 million, much wider than a year earlier, as it soaked up one-off charges and the cost of opening more stores amid fierce competition in the industry.
Li Ning, which faces off in China against global industry giants like Nike Inc, said in a Hong Kong stock exchange filing its net loss widened to 585.8 million yuan ($95 million) from a net loss of 184.2 million yuan in the same period a year earlier.
But China's second-biggest home-grown sportswear maker said first-half revenue rose 8 percent year-on-year to 3.14 billion yuan, helped by higher sales of new products as it expanded its chain of directly operated stores. Li Ning said that with the "first phase" of a turnaround plan complete, it now plans to focus on boosting its brand image.
The company, whose investors include private equity firm TPG Capital Management and Singapore sovereign wealth fund GIC, had warned in July that it would post at least 550 million yuan loss for the first half.
"As the first phase of the turnaround is completed with an optimised and stable store network, the company is poised for the next stage of re-expansion," founder and chairman Li Ning said in the filing to the Hong Kong bourse. The firm had said in March that restructuring would "take time to reflect fully" in its financial results.
Li Ning faces stiff competition from Chinese rivals as well as international peers. Earlier this month ANTA Sports Products Ltd, China's biggest listed footwear retailer by market value, posted a forecast-beating 28 percent rise in first-half profit.
Earlier this year, Li Ning also lost out to ANTA Sports in securing a sponsorship deal with Chinese national gymnastics team.
Other Chinese rivals like Peak Sport Products Co Ltd , 361 Degrees International Ltd and Xtep International Holdings Ltd are due to announce their earnings later this month.
(1 US dollar = 6.1531 Chinese yuan) (Reporting by Donny Kwok; Editing by Kenneth Maxwell)