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.
The recent bankruptcy of South Korea's Hanjin Shipping, the world's seventh-largest container shipper, at the end of August, has left billions of dollars worth of merchandise in limbo, leaving the fal...
The ongoing challenge of tackling transparency and traceability across global supply chains cropped up again last week, with the launch of a new initiative to try to eliminate forced labour from cotto...
As a barometer of the latest trends in the US apparel sourcing landscape, the recent Sourcing at MAGIC trade show pointed to a shift from regional to global sourcing, a move towards fewer but more cap...
Mike Flanagan, CEO at industry consultancy Clothesource, spent the first six months of 2016 campaigning to stay in the EU. Not once, he says, did he hear his opponents - or anyone in Britain's new, Br...
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