SBD/December 18, 2012/Marketing and Sponsorship

Li-Ning Signs On As Heat Official Partner; Facing Substantial Net Loss In '13

Wade (l) will receive support for his new line of Li-Ning footwear and apparel
Li-Ning yesterday announced a sponsorship deal with the Heat, effective immediately, giving the China-based brand the designation of official partner. The deal is part of a marketing program to support Heat G Dwyane Wade's new signature line of footwear and apparel. Aspects of the partnership include signage at AmericanAirlines Arena and other advertising assets on team properties, such as Heat.com and TV broadcasts on Sun Sports. Li-Ning products will be sold at the arena beginning in '13 (Li-Ning). In Ft. Lauderdale, Craig Davis noted the Li-Ning deal is the “first manifestation” of the Heat's preseason tour of China in October (SUN-SENTINEL.com, 12/17).

AT A LOSS: Meanwhile, the WALL STREET JOURNAL’s Laurie Burkitt cites Li-Ning execs as saying that the company will “record a substantial net loss for the year,” as it attempts a “major turnaround of the struggling Chinese sportswear company.” Li-Ning CEO Jin-Goon Kim said that losses have been “caused primarily from the reset of trade credits, not by company operations.” Li-Ning is “in the midst of a three-year overhaul, aiming to win a bigger slice of sports-apparel sales on its home turf and to improve profitability.” It ordered “excess apparel years ago in anticipation of sportswear shopping sprees by Chinese consumers following the 2008 Beijing Olympics,” and the company has been “struggling since then to clear its shelves" (WALL STREET JOURNAL, 12/18). Analysts "expect Li-Ning to report a net loss" of $19.4M this year (BLOOMBERG NEWS, 12/16).
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