Blog: Acquisitions continue to attract Li & Fung
Leonie Barrie | 13 August 2012
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.
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.
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.
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.
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.
Over the past month, Donald Trump and his team failed to offer any clear plan to ensure Americans would "Buy American, Hire American" - while the British government's attempts to clarify the specifics...
The Bangladesh government was forced to respond late last week to pressure over its crackdown on labour activists after a number of global brands and retailers, including H&M and Inditex announced pla...
Fresh from their disappointment at seeing the Trans-Pacific Partnership (TPP) free trade deal abandoned last month with an executive order by President Donald Trump, the US apparel and footwear sector...
With the ultimate aim of ensuring all the cotton in its products is sourced sustainably, value clothing retailer Primark is adamant that having a business model focused on offering the lowest prices o...
- Digitalisation and data to disrupt supply chains
- EU eyes mandatory due diligence for apparel supply
- Unlocks for the future fashion sourcing landscape
- What TTIP might mean for US, EU textiles & apparel
- Geo-political uncertainty and how to survive it
- Li & Fung forms supply chain partnership with PVH
- US Q4 in brief – Finish Line, Oxford Industries
- Levi Strauss and ILO probe Cambodia factory death
- Big data to help US firms improve clothing fit
- Next books first FY profit fall in eight years
- Central and East Europe Report Package
- Central America strategic sourcing review - a focus on Guatemala, El Salvador and Honduras
- Southeast Asia strategic sourcing review – a focus on Cambodia, Vietnam and Myanmar
- REPORT BUNDLE: Africa-Med, Southeast Asia and Central America strategic sourcing pack
- When Things Go Wrong - A Practical Guide to Managing Common Problems in Apparel Sourcing