Li & Fung remains stable after creation of Global Brands
The Hong Kong sourcing specialist recorded a turnover of 19 billion dollars, up 1.4% for its 2014 fiscal year. The year was marked by the spin-off of its clothing business, reorganized as part of Global Brands Group.
The major undertaking explains in particular the decline of its operating profits to 604 million dollars, an 18% drop. Between 2013 and 2014, its geographical distribution of its business changed little. The United States accounted for 60%, ahead of Europe at 18% (-1 point). Asia grew to 14% (+1 point), while the rest of the world is now at 8%.
Via its European Apparel Group (EAG) organization, Li & Fung acquired the British company May Trading, a supplier for retailers including Primark, Topman and Next. The operation brings the number of suppliers owned by EAG to three.
"Following the Global Brands spin-off, Li & Fung has returned to its earlier business model of strong cash flow generation, less volatility on earnings and a strong balance sheet. Going forward, we will continue to evaluate the changing dynamics of the consumer goods industry and allocate capital where necessary to invest in high growth and underserved areas."
Last year, Global Brands Group generated a turnover of 3.45 billion dollars, a 5% increase. The company includes some 350 licenses, including those for Tommy Hilfiger, Guess, Calvin Klein, Izod, Nautica and Coach, and various brands directly controlled by the organization, including Frye, Juicy Couture and Rosetti.
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