Li & Fung’s 2011 results and textile portfolio

Li & Fung’s 2011 results and textile portfolio

The Hong Kong based Li & Fung Ltd. (Trading, Logistics and Distribution) has been portrayed in the December 2011 issue of TextileFuture’s e-paper. The company presents excellent results for 2011 and has made acquisitions in the apparel sector.

The group achieved a 26% higher turnover of slightly over USD 20 (USD 15.91) billion and a 22 % higher core operating profit of USD 882 (USD 725) million however in percent of the turnover the margin fell slightly from 4.56 % to 4.40 %.

Looking at the business segments Trading contributed sales of USD 15.88 billion or 709% of the total group turnover, Logistics USD 446.43 million or 2 % of total and Distribution USD6.31 billion or 28 % of total. The total group turnover of USD 20.03 billion was reduced by discontinued businesses and sales of USD 2.60 billion. USD12 (USD 10.35) billion from total sales derived from the USA or 60% (65 %) of total group turnover, USD 4.28 (USD 3.86) billion or 21 % (24 %) from Europe, USD 1.13 billion (280.9 million) or 6 % (2 %) from China the rest of Asia (including Japan) contributed USD 1.22 billion (USD 262.53 million), Canada USD 674.18 (USD 530) million, Australasia USD 378.20 (USD 361.94 million), Central and Latin America close to USD 257 (USD187.27) million and South Africa and Middle East USD 102.7 (USD 87.05) million.

In 2011 the group signed 18 acquisition deals thereof 12 for Trading, six for Distribution. The annualised turnover of 19 newly acquired companies (including Oxford Apparel) amounted to around USD 2 billion and at an operating profit of US 211 million. Other textile related acquisitions were Modium (a virtual manufacturer of ladies’ and men’s woven apparel based in Istanbul (TR), Celissa (trading, catering wovens and knits to customers), Loyaltex Apparel, a sourcing and development company for knits, woven/denim and sweaters. This acquisition will add a new portfolio of customers including Aeropostale (selling casual clothing in over 900 stores in the USA, Canada and Puerto Rico to teenagers of 14 to 17), Sanmar (distributor, among apparel), Lloyd Textile Fashion Company Ltd. (design functions), Beyond Productions (designer and licensor of women’s fashion apparel and accessories) to enhance the retail channel in distribution, TVMania – with characters such as Hello Kitty, Mickey Mouse, Cars, Batman, Ben 10, Bakugan, Star Wars, Barbie, Pokémon, Bob the Builder, Sponge Bob, Spiderman Movies, Dora the Explorer, etc., it is the leading Pan-European supplier of character licensed and branded merchandise and the main product categories are casual, nightwear and underwear and this acquisition serves to complement Kids Headquarters (acquired in 2009) and will allow the group to become the largest global player in licensed apparel trading. Further acquisitions were Hampshire Designers, Inc., the women’s division of Hampshire Group Limited in the US and it is expected to further expand the groups women’s knitwear and woven product offerings and capabilities, and Fishman & Tobin, (children’s apparel, key supplier to boy’s dress wear market, specialised also in boys and girls school uniforms and sportswear as well as men’s dress wear and will expand the licensed brands portfolio to dressier boy’ and girls’ apparel and last but not least also Midway Enterprises (Guangzhou) LTD, Wonderful World (Hong Kong) Ltd. and Wonderful World Overseas Ltd, all from the Roly Group and these companies operate children apparel and toys business in Greater China and opens up for Li & Fung new markets and product categories, including the children’s market in China.

Actually Li & Fung pursues a three year plan (2011-13) in order to achieve a future core operating profit of USD 1.5 billion by 2013 deriving from Trading will be USD 0.7 billion, Logistics USD 0.1 billion and Distribution 0.7 billion. The company employed 29624 persons thereof 4518 are based in Hong Long and 25’106 overseas and in mainland China. 2011 also an Employee Survey (anonym and web-based) was responded by 11237 employees out of 14490 invitations and conducted by an outside company. Li & Fung has also made a declaration on human rights – to be read on the company’s website – that is not only valid for the group but also for business partners.

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