* Revenues fall 12.8 pct on inventory clearance
* Gross profit margin improves to 44.5 pct from 37.7 pct
* Operates 519 fewer retail stores in China as of end-Dec (Adds industry outlook, details of earnings performance)
HONG KONG, March 24 (Reuters) - Li Ning Co Ltd spilt red ink for a second straight year in 2013 but the loss was much smaller than the previous year as China's best known sportswear company offered fewer retail discounts and replenished inventory faster.
China's sportswear makers appear to be emerging from years of overzealous expansion that had been fuelled by Beijing Olympic Games fever. ANTA Sports Products Ltd, the country's biggest player, this month reported a third straight quarter of order growth.
While making significant progress, Li Ning's earnings fell short of market expectations and the company said its restructuring efforts would "take time to reflect fully in its financial results." Its shares were down 1.2 percent in early trade compared with a 0.7 percent rise for the broader market.
Li Ning, which is backed by U.S. private equity firm TPG Capital and Singapore sovereign fund GIC, posted a net loss attributable to equity holders of 391.5 million yuan ($63 million) for 2013, compared to a 1.98 billion yuan loss in the year ago period.
That lagged a Thomson Reuters' Starmine SmartEstimate of 364 million yuan.
The company also said Executive Vice Chairman Jin-Goon Kim, who is also a partner at TPG, has been appointed interim chief executive of the company with effect from March 21. The CEO position had been left vacant for some time.
Li Ning, which has a market value of $1.05 billion, said full-year revenue fell 12.8 percent to 5.82 billion yuan, partly due to its near-term focus on inventory clearance. Gross profit margin improved to 44.5 percent from 37.7 percent in 2012.
The company now operates 5,915 retail stores in China as of end-December, 519 fewer stores than a year earlier.
In August, Li Ning posted a smaller-than-expected loss in the first half of 2013, and said inventory levels had returned to close to normal levels.
($1 = 6.2250 Chinese Yuan) ($1 = 7.7588 Hong Kong Dollars) (Reporting by Donny Kwok; Editing by Edwina Gibbs)
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