Li Ning rejects store closures reports, stresses 2011 store growth

Sportswear maker Li Ning (2331.HK) plans to merge 500-600 of its more inefficient sub-distributors, rather than closing stores outright, Beijing Youth Daily reported December 28 citing company spokesman Zhang Xiaoyan. The company aims to encourage larger distributors to consolidate smaller, less efficient stores and large distributors to increase its directly owned stores.

Zhang said Li Ning maintains its target of reaching 7,900 stores in 2011, according to the report. By the end of the first half of 2010, the company had 7,004 franchised retail outlets and 474 directly-operated stores. According to Zhang, at that time, Li Ning had 129 distributors and more than 2,000 sub-distributors, over 1,700 of which only operated one store.

November reports said Li Ning was considering closing 500-600 stores, integrate distribution channels, and raise its wholesale discount levels by three percentage points next year.