SBD/January 19, 2011/Marketing and Sponsorship

Li Ning Plans To Invest $10M In U.S. Business In '11

After opening showroom in Portland in '10, Li Ning plans to open U.S. warehouses
Li Ning CEO Zhang Zhiyong yesterday said that the Chinese sports-apparel company will "invest $10 million in its U.S. business this year and enter a joint-venture with Acquity Group LLC to expand U.S. distribution," according to Laurie Burkitt of the WALL STREET JOURNAL. Acquity, a Chicago-based brand-consulting firm, is designing an ad campaign for Li Ning that will be the brand's "biggest yet for the U.S. market." The effort is "expected to roll out in May, with television, print and Web spots." Li Ning's move is "part of a continuing push to broaden its reach into the U.S. and other global markets to compete more extensively with larger rivals" Nike and adidas. Zhang said that Li Ning, which opened its first U.S. showroom in Portland last year, "plans to open warehouses this year to extend its distribution of shoes, apparel and accessories to retail deals it plans to sign in coming months." Zhang noted that Li Ning "aims to push U.S. sales" to $50M this year. The company said that sales outside China "accounted for 2% of revenue last year." Zhang said that to "help overhaul Li Ning's products for American tastes and body types, the company plans to hire 20 product developers in coming months." At the same time, Burkitt notes Li Ning "faces challenges in its domestic market, where second-quarter order volume for apparel declined more than 7% and footwear orders dropped 8% from a year earlier" (WALL STREET JOURNAL, 1/19). SportsOneSource analyst Matt Powell believes that Li Ning's "primary goal in the U.S. is to help with sales on its home turf." Powell: "They're trying to build a platform here to give themselves real credibility with their customers back in China" (Portland OREGONIAN, 1/19).
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