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March 26, 2012 1:59 PM

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Game On, Li-Ning Suits Up

For years there have been murmurs, whispers and fears on Seventh Avenue that China was not content to be fashion's manufacturing muscle, that one of the country's powerhouse producers would turn the tide and start exporting its brand to the...

For years there have been murmurs, whispers and fears on Seventh Avenue that China was not content to be fashion's manufacturing muscle, that one of the country's powerhouse producers would turn the tide and start exporting its brand to the rest of the world.
That day might have finally come.

China's own Li-Ning, the world's third-largest activewear company, officially launched a U.S. e-commerce site last week. "The Villain" basketball sneaker goes for $100 and the "Turningpoint" basketball jacket goes for $80.

At first glance, the brand -- named after a Chinese sports star who won six medals in the 1984 Olympics -- seems to be kind of limping into U.S.

A Web site does not seem like the vanguard of a great market-changing force. Plans to scoop up some of the excess real estate on the market and roll out a fleet of stores, yes. But a Web site?

Once my colleague Karyn Monget got Ray Grady, general manager of the brand's U.S. operation, talking, the online venture began to look more interesting.

"We are launching into the [digital] retail landscape at a time when retail is evolving and changing -- Gap is shuttering stores while Amazon is wildly successful....Our target demographic skews younger, Millennials or even if they are not Millennials, they are open to change," Grady said.

"Our approach is candidly what our competitors are trying to reinvent themselves with....We have a pilot campaign with Pandora and we are currently in talks with other brands....The brand is also showing up in sneakerhead blogs, a huge [basketball] subculture, and when we talk to the running category it's a slightly different voice with a biographical, philosophical approach," he said.

Yes, it would seem more solid if Li-Ning charged in with plans for 300 stores. But that rarely seems to have worked in the past. Think of Esprit, which last year admitted the brand had "lost its soul" and said it would close down its U.S. stores.

Still, it's not clear that Li-Ning is the game changer.

For one, the brand is working through some issues.

The company's revenues slipped 4.8 percent to 4.29 billion yuan, or $655 million at average exchange for the six months ended June 30. Profits attributable to shareholders declined 49.5 percent to 293.7 million yuan, or $44.9 million and the company said it is taking steps to revitalize its brand and reform its distribution.

If Li-Ning doesn't take the U.S. market or the world by storm, it seems reasonable to assume some other Chinese brand eventually will. And when the roll out comes, there's nothing that says it has to look like anything we've seen before.
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