HONG KONG: Li & Fung inks new sourcing deal with Wal-Mart
By Leonie Barrie | 20 September 2012
A sourcing deal inked more than two years ago between Li & Fung and Wal-Mart Stores has been replaced by a new agreement that allows the global supply chain manager to offer a range of new services to the retail giant.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.
Sectors: Apparel, Manufacturing, Retail, Social & environmental responsibility, Sourcing
Companies: Wal-Mart, Li & Fung
View next/previous articles
21 Sep 2012 -
Currently reading -
HONG KONG: Li & Fung inks new sourcing deal with Wal-Mart
20 Sep 2012 -
Related research
Wal-Mart Brazil: Consumer Profile
Wal-Mart Brazil: Consumer Profile is the result of Canadean’s extensive online consumer survey Wal-Mart in Brazil, presenting uniquely detailed data on Wal-Mart’s end-consumers. It provides retailer profiles for both Main and Occasional consumers (de...
Walmart Chile S.A. : Retail - Company Profile & SWOT Report
Canadean's "Walmart Chile S.A. : Retail - Company Profile & SWOT Report" contains in depth information and data about the company and its operations. The profile contains a company overview, key facts, major products and services, swot analysis, busi...
Wal-Mart Stores, Inc. (WMT) - Financial and Strategic SWOT Analysis Review
Wal-Mart Stores, Inc. (Wal-Mart) is the world’s largest retailer. The company operates retail stores in a variety of formats including discount stores, supercenters, neighborhood markets and club stores. It offers branded as well as private label pro...
Related articles
There are currently no comments on this article
Be the first to comment on this article