HONG KONG: Li & Fung inks new sourcing deal with Wal-Mart
A sourcing deal inked more than two years ago between Li & Fung and Wal-Mart Stores has been replaced by a new agreement that allows the global supply chain manager to offer a range of new services to the retail giant.
The original deal, announced in January 2010, involved Li & Fung setting up a new sourcing unit for Wal-Mart called Direct Sourcing Group Pte Ltd. Reports at the time said it had the potential to buy goods worth about $2bn in its first year of operation.
Under the new arrangement, Wal-Mart no longer has the option to purchase all of the shares of Direct Sourcing - although the unit will continue as the main direct resource for the retailer's Sam's Club warehouse format in the US.
The unit will also provide buying agency services to Walmart in the US and some international markets on a "category-specific basis," Li & Fung said, without giving details. The new agency agreement will run for five years with an option to extend for another two years.
In addition, another of Li & Fung's subsidiaries "will trade with Walmart International markets on a principal to principal basis."
"The move to a supplier relationship will allow the group to provide Walmart International markets with design, replenishment and other services that could not be provided as a buying agent," the sourcing group said in a statement today (20 September).
The previous deal saw Wal-Mart shift from using the Hong Kong firm's wholesale operations in the US in a bid to drive savings across a supply chain. The new arrangement cements Wal-Mart's position as now one of Li & Fung's largest customers.
The UK-based George at Asda clothing brand remains committed to sourcing in Bangladesh, even though at least 112 workers were killed in a factory fire last year while illegally subcontracted to produc...
Wal-Mart has revealed that its efforts to turn around its apparel business is starting to gain traction after reporting its first full-year of positive comparable apparel sales in the US in seven year...
Updated sourcing guidelines released this week by Wal-Mart have received a tepid reception at best, with industry watchers warning they are sceptical as to whether the new rules will be fully enforced...
Men's Wearhouse has today (6 March) appointed Jon Kimmins as executive vice president, chief financial officer and treasurer. ...
Workers at a shuttered apparel factory in the Cambodian capital Phnom Penh are set to receive some US$200,000 worth of unpaid wages and benefits after the factory closed unexpectedly....
- MYANMAR SNAPSHOT: Textile and apparel industry
- Clothing seen as central focus for new Tesco CEO
- Indian apparel exporters discuss policy changes
- Alliance members buy more products from Bangladesh
- VF Corp bullish for second-half growth
- Crystal Group improves worker communication
- TIMELINE: Charney ousting from American Apparel
- VF Corp books "solid" Q2 performance
- Columbia Sportswear fined for mislabelled clothing
- “Made in USA” company rapped for deceptive claims
- Global market review of denim and jeanswear – forecasts to 2020
- Management briefing: Sourcing shifts: Changes and challenges
- American Eagle Outfitters, Inc. : Reacting to a need for change
- Ethiopia – the emerging textile and clothing industry
- Plunkett's Apparel & Textiles Industry Almanac 2014: Apparel & Textiles Industry Market Research, Statistics, Trends & Leading Companies