Li Ning unveils revival plan to revitalize channels

The Channel Revival Plan will allow channel partners to bring to market a higher mix of new products that better matches the demographics of their customers, and will also support channel partners in strengthening their financial position and cash flow for growth. The costs for the Channel Revival Plan will be mostly non-cash and take the form of accounts receivable offsets. In addition, Li Ning Company has also revamped channel policies to support channel partners with strong retail capabilities.

Many top channel partners participated in the pilot channel revival plan. Mr. Liu Guozhong, President of Shandong Liwei, one of Li Ning Company's top distributors, said, "The Channel Revival Plan is very encouraging. It's a feasible solution to help clear excess inventory and strengthen our financial position in the long run. We look forward to furthering our cooperation with Li Ning Company, overcoming challenges on inventory buildup, strengthening our retail capabilities and enhancing our profitability."

Based on the preliminary review of unaudited consolidated management accounts of the Group for the eleven months ended 30 November 2012, it is expected that the Group will report a substantial loss for the year ending December 31, 2012. Such information has not been reviewed or confirmed by the auditor of the Company. Further details of the Group's financial results for the year ending 31 December 2012 will be disclosed in the Company's 2012 annual results announcement. It is expected that the loss is primarily attributable to the one-time costs relating to the implementation of the transformation plan, including the Channel Revival Plan.

Mr. Kim concluded, "Our management team will work closely with key channel partners to finalize and execute each of their revival programs over the next few months under the Board's guidance. We believe Li Ning's initiatives will be critical to leading the Group and its channel partners to not only weather through the inventory buildup issues faced by the industry, but to create a new model that will result in profitable long-term growth for the business overall."

Li Ning