Li Ning expects profit decline

Chinese sportswear brand Li Ning expects a “substantial decline” in profit for 2012 because of a drop in sales and increase marketing costs that caused its shares to fall to a 6-and-a-half-year low.

Li Ning faces competition from foreign brands including Nike and Adidas.

Shares in Li Ning have fallen by as much as 7 percent to their lowest level since January 2006. According to reports, here shares are not expected to drop further because most investors who wanted to sell the shares have already done so.

“Competition within the sporting goods industry has intensified, viagra sale | discount promoting efforts have further increased and the pressure of inventory clearance at the retail level remains strong, denture ” Li Ning said in a statement.

Li Ning said it also faced a “substantial” increase in brand marketing and promotion costs following its deal with the Chinese Bastkeball Association(CBA). The company has a five-year agreement to be the equipment sponsor for the CBA that runs until 2016/2017.

The sportswear manufacturer  has devised various strategies to revive its profits. A company statement said: “During this year and next year, the group will strive to clear out inventory at the retail level, streamline the retail store network, control the pace of new store openings, close down inefficient stores and improve retail efficiency.”