Oct 11 Chinese sportswear firm Meike
is offering a one-off subsidy to its distributors in hopes of
getting them to better market its products ranging from track
shoes to T-shirts in a highly competitive sector.
China's sportswear industry has been suffering from an
oversupply over the past two years and competition has been
fierce among foreign firms - such as Nike Inc and Adidas
AG - and domestic players like Li Ning Co Ltd
To help fend off the competition, Meike International
Holdings Ltd, based in China's southern Fujian province, is
giving a one-off subsidy of 51 million yuan ($8.4 million) to 19
distributors, it said in a statement on the Hong Kong stock
Meike also hopes that the subsidy, which would partly be
used to renovate approximately 450 Meike-branded stores, will
help distributors clear out excess inventories and boost their
promotional and marketing skills, it said.
However the expenditure will likely pressure Meike's results
this year, said the company which posted a net loss of 151
million yuan in 2012.
The announcement came after Hong Kong markets closed on
Friday. Meike's shares ended 2.3 percent lower, underperforming
the main Hang Seng Index's 1.2 percent rise.
(Reporting by Lee Chyen Yee in Singapore and Meg Shen in Hong