Blog: Sourcing on the agenda...again
Leonie Barrie | 25 March 2009
Bullish is a good word to describe global sourcing giant Li &Fung. The Hong Kong based firm today said it is still targeting further acquisitions and outsourcing deals despite posting a 21% slide in full-year profit.
Its upbeat outlook comes as, on the one hand, sales rose 20% in the year to HKD110.7bn (US$14.2bn) helped by organic growth and a range of outsourcing deals and acquisitions. On the other hand, though, profits were hit by weak consumer markets and one-off events such as restructuring costs in the US, as well as start-up costs in Europe.
But the company’s fortunes are, of course, inextricably linked to those of the retailers and brands it supplies.
“When things are good, there's no need to change and there's inertia. People are very comfortable with their supply. But when things are bad, people look for alternative ways of doing things,” Li & Fung president Bruce Rockowitz told just-style in January. He added: “We're in a cycle now where price is paramount.”
Over the past year, Li & Fung has taken on sourcing for Toys R Us' private label business, Sanrio, Timberland’s apparel business and Mexx. And earlier this month it took on Liz Claiborne’s sourcing operations in a move that will add an extra $1bn in revenues in 2009.
So while many of its retail customers are unlikely to see any growth in 2009, the firm is also one of the few to benefit from new outsourcing opportunities as retailers offload their sourcing interests to focus on their core retail concerns.
And it’s probably fair to say that the question over whether or not sourcing is done in-house or contracted out is likely to be on every major retailer’s agenda just now.
Some of just-style’s more eagle-eyed readers might have noticed a small change to the menu bar on the homepage: the addition of the word re:source. Yes it might be a small change – but it marks the co...
Over the past week just-style has continued to try to unravel the potential ramifications of Donald Trump’s election as the next president of the United States....
One event dominated the international airwaves last week, and on just-style too we took a closer look at the surprise election of Donald Trump as the 45th president of the United States....
As the Brexit roller-coaster continues to twist and turn, and the US presidential election campaign nears its unpredictable and possibly protectionist end, there's no doubt these events – and the perc...
- Why do modern robotics elude sportswear makers?
- Traditional financing is a misfit for fast fashion
- Trump trade policy – Who knows what he'll do?
- Planning is key to an effective inventory strategy
- How would end of NAFTA affect US apparel industry?
- US Q3 in brief - G-III Apparel, Express
- Bagir exports first trousers for H&M from Ethiopia
- Film documents Cambodia garment workers' stories
- Esquel efficiency drive continues to boost brands
- Pakistan suspends India cotton imports
- Outdoor performance apparel 2016: A broader perspective
- Global market review of lingerie – forecasts to 2022
- Global apparel markets: product developments and innovations, October 2016
- Footwear Top 5 Emerging Markets Industry Guide_2016
- REPORT BUNDLE: Africa-Med, Southeast Asia and Central America strategic sourcing pack