Li & Fung, the world's largest supplier of apparel and consumer goods, says growth through strategic acquisitions and the trend for outsourcing by retailers and brands will continue to drive its business going forward – despite posting a slump in core first-half operating profit.

The comments came as the Hong Kong based group saw core operating profit tumble 22% to US$221m in the first six months of the year, although turnover edged up 4% to $9.128bn.

Noting that more acquisition deals are available at attractive prices in a time of global economic uncertainty, the company stressed it is still focused on setting the stage for 2013, the last year of its current three-year plan which hopes to reach a core operating profit of $1.5bn.

Li & Fung committed to growth through acquisitions

HONG KONG: Li & Fung core H1 profit drops 22%

But apparel group Warnaco has cut its full-year projections after second quarter profit slumped 79%, hit by a $12m charge linked to its 2008 sale of lingerie brand Lejaby. A strong performance from swimwear brand Speedo thanks to the Olympics was more than offset by declines in sportswear and intimate apparel, which the company blamed on challenging market conditions, particularly in the US and Europe.

In the money: Charges impair Warnaco recovery plan

US: Warnaco cuts FY guidance as Q2 profit slumps

The outpouring of rage that followed the revelation that Olympic opening ceremony uniforms for US athletes were made in China highlights a 'New Accountability' in apparel sourcing, where buyers and sellers will have to accept the increasing influence of outsiders on how they do business.

The Flanarant: Olympics signal new scrutiny in apparel sourcing

In Bangladesh, global clothing brands and retailers are pressing the government to establish a forum where buyers can raise concerns and discuss current topics, following recent waves of labour unrest. The firms want to see a permanent liaison body and a regular review of minimum wages. Separately, moves are also underway to implement the International Labour Organization’s Better Work Programme.

BANGLADESH: Clothing brands call for buyers' forum

BANGLADESH: Garment makers work with ILO on labour issues

And the arrival of new autumn ranges coincided with cooler weather in July and helped make clothing and footwear the “brightest spot” for UK retailers during the month. Figures showed consumers responded enthusiastically to the chance to refresh their wardrobes with items they could make use of straight away.

UK: Cool weather drives July clothing and footwear sales

Until next time...

Leonie Barrie
Managing Editor
Web: http://www.just-style.com
Email: editor@just-style.com
Twitter: http://twitter.com/juststyle