Li Ning in February 2015 Photo: CFP

Chinese sportswear maker Li Ning Co said on Thursday its namesake founder was returning to lead a turnaround drive, as the former industry leader posted a third consecutive year of losses, squeezed by global brands and cheap local rivals.

The former Olympic champion gymnast returns as interim chief executive to replace Kim Jin-goon, an executive of US private equity fund and Li Ning backer TPG Capital, who stepped down in November.

The company is also betting that collaborations with tech companies such as smartphone maker Xiaomi and a mid-ranged pricing strategy will boost sales in 2015 and attract younger customers.

News of Li's return helped lift the stock nearly 12 percent to its highest close since September in 2014.

"It fueled hope that Li may bring some good changes," said Steven Leung, a Hong Kong-based broker at UOB Kay Hian. "But we remain cautious on its store expansion when the industry is still facing a lot of challenges."

Li Ning, also backed by Singapore sovereign fund GIC, said on Thursday its net loss nearly doubled to $125 million.

The company has struggled to compete with global powerhouses like Nike Inc and cheaper domestic brands, trimming its store network to just over 5,600 in China in 2014 from over 8,000 a few years ago.

Chief Financial Officer Terence Tsang, told an earnings briefing the company aims to achieve mid-to-high single digit growth in same-store sales in 2015.

Li Ning posted a net loss of 781.5 million yuan ($125 million) for 2014, versus a 391.5 million yuan loss a year earlier. The loss was in line with analysts' forecasts.