Sports brand Li Ning Co. laid out a multiyear plan to boost its performance that started out with a big change at the top.
Zhang Zhiyong, chief executive officer of the Hong Kong firm, stepped down Wednesday. He is no longer on the executive committee, but will stay on as an adviser to ease the transition.
Jin-Goon Kim, executive vice chairman and a partner at private equity firm TPG Capital, and Li Ning, founder and executive chairman, will lead the company until a new ceo is found.
Investors in Hong Kong applauded the move, driving the stock up 7.3 percent to 5.03 Hong Kong dollars, or 65 cents a current exchange.
“We are determined to develop Li Ning into a world-class sports brand, a brand that is fundamentally anchored on sports values and sports essence,” said the founder, who was a gymnastics star in China.
The company — sometimes referred to as the Nike of China — has a three-stage plan for its rejuvenation.
Phase one, which is underway, includes short-term efforts to better manage inventory, cut costs and focus on core products in China.
The second part of the plan centers around bolstering the company’s supply chain, marketing and product planning model.
In stage three, executives will make sure the company has the right business model to improve profits and sell-through, retail profitability and return on cash.
“We believe the three-stage blueprint will give the group the focus and clarity it needs to execute its development strategy,” Kim said. “I am confident that with the collective efforts of the chairman and a strengthened management team, supported by TPG’s wealth of operational know-how, we will build a platform for the group with world-class operational capabilities.”
TPG invested in Li Ning in January.
Li Ning also appointed Samuel Su, chairman of the Yum Brands Chinese division, as an independent non-executive director.
The sports brand is testing the U.S. market with an e-commerce site.