Chinese apparel and footwear brand wants to popularise basketball across cultures
The founder of the Chinese leading apparel and footwear company bearing his name, Li-Ning and American NBA All-Star Dwyane Wade have a deep understanding and this is now leading to the creation of a new athletic footwear and apparel brand called WADE that will serve as the centrepiece of the corporation’s growing international basketball strategy to be shaped by an unprecedented level of creative and strategic direction from the two-time NBA Champion
The unique partnership will seek to connect Wade’s renowned methods of style, training and personal growth with LI-NING’s values of dream, inspiration and enterprise. It will draw upon the similar business and athletic philosophies upheld by Wade and Li Ning, a three-time Olympic Gold Medalist in Gymnastics in 1984, and the final torchbearer, who lit the 2008 Beijing Olympic Games cauldron in one of the most memorable moments ever during an Olympic Opening Ceremony.Wade will serve in an official capacity as Chief Brand Officer, and be responsible for guiding the creative direction of all WADE products. He will work with LI-NING’s WADE leadership team to spearhead the global marketing strategies and initiatives aimed to build brand awareness in the USA and China. Wade will provide additionally a significant input and approval license for all future endorsers for the WADE brand, and be instrumental in selecting the athletes he feels best embody the presence, perspective and personality of the brand.
Prior to the official launch of his shoe, Wade will wear two specially-created, high performance LI-NING branded basketball sneakers during upcoming Miami HEAT games, including two pre-season games played last week in Beijing and Shanghai against the Los Angeles Clippers (USA). Shoes from the first two preseason games will be held for auction in China.
In the next future the Chinese company also plans to launch a WADE children footwear and apparel line.
The agreement between LI-NING and WADE was brokered by CAA Sports, a division of Creative Artists Agency (CAA), the world’s leading entertainment and sports agency and acted on behalf of its client, Wade.
According to the Wall Street Journal the partnering between Li Ning and Wade has not been received well by investors, because they cautiously weigh TPG’s plans to turn around the Chinese sportswear company will not be successful and the share price of NI Ling fell yesterday by 4.8 %. It was not the news that provoked the decrease but the fact that a complex share transaction whereby Mr. Lee shuffled his 25 % stake between entities he controls. He sold the shares he previously held in two private vehicles to another company, Viva China – a sports talent management agency listed in Hong Kong and in which he owns a controlling 55 % stake.
The transaction values Mr. Li’s shares at around USD 175 million, a premium of 21 % to the average price over the past 50 days. Viva is paying with its own stock, in the form of new shares and a convertible bond. Thus Li’s stake in Viva will rise to between 75 % and 86 %. Viva had about USD 144 million in cash on its balance sheet at the end of 2011, and its net operating cash flow for the past few years has been a fraction of that figure. Thus Li is not cashing out, but he has shuffled his Li Ning stake at a premium price into a relatively cash-rich vehicle he controls. Viva’s minority investors now benefit from any Li Ning upside, which explains why its shares jumped sharply on Wednesday, but lI has also significantly limited his downside in Li Ning too. China’s sportswear sector offers much potential however, but Li Ning is caught in a tough spot, with profits falling as it is squeezed between relatively expensive, keen foreign brands such as Nike, and local low cost competitors. Last January, TPG invested around USD 90 million in Li Ning convertible bonds that could be worth a 12 % stake. The buyout group is working toward a three year plan to fix the business. Li Ning’s chief financial officer left last week, and the company’s long time CEO stepped down in July. The stock trades at less than half of its highest value of the past 12 months.