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China's Li Ning to open fewer, bigger stores to compete against e-commerce

Chinese sportswear company Li Ning Co. Ltd. plans to open fewer, bigger stores and has diversified into children's and women's sports brands as it seeks to cope with e-commerce competition, the Nikkei Asian Review reported Aug. 11.

"We believe that cannibalization from online business did have a negative impact on our offline sales," Li Ning CFO Terence Tsang Wah-fung reportedly said at an earnings briefing.

The Nikkei said the company will open about 100 of its newly launched Li-Ning Young children's sports stores in 2017, including 70 stores in the second half, and three to five of its women's sports brand Danskin stores in the fourth quarter, while shutting between 200 and 300 of its core stores.

Li Ning will reportedly also open bigger stores to improve customer experience, with an average area of 400 to 500 square meters from the previous 80- to 200-square-meter stores.

According to the report, e-commerce sales of the sportswear maker in the first half of 2017 grew 58% year over year to comprise 19% of the company's overall sales, while same-store sales fell by a low-single-digit percentage in the same period.