By Kathy Chu
HONG KONG--Sourcing company Li & Fung Ltd., a major
middleman in the global apparel supply chain, said its 2013 net
profit rose 17% thanks to a turnaround in its U.S. distribution
business.
The Hong Kong company, which is a buying agent for retailers
including Wal-Mart Stores Inc. and Target Corp., said Thursday its
net profit rose to US$725.3 million from US$617.4 million a year
earlier. Revenue rose 3% to US$20.75 billion from US$20.22
billion.
Li & Fung said the company generated more business in the
latter half of 2013, as clients placed orders closer to the
year-end holiday shopping season. The company has also been
restructuring its ailing LF USA product design and marketing
business.
Still, the company remains susceptible to the global economic
weakness, as well as efforts by retailers to cut out middlemen and
work directly with factories. In 2012, Wal-Mart canceled much of a
deal in which Li & Fung would supply goods for the U.S.-based
retailer's overseas stores.
Children's apparel companies Carter's Inc. and Gymboree Corp.
have said they plan to obtain more of their products directly in
coming years as well.
Li & Fung has been moving away from distributing products
toward buying consumer-goods brands to boost its logistics and
freight-forwarding businesses. Last year, the company acquired
U.K.-based Lornamead Acquisitions Ltd., owner of Finesse shampoo,
for around US$190 million.
The sourcing company also said Thursday it signed a deal to buy
China Container Line Ltd., a sea-freight-forwarding company in
mainland China. Li & Fung said it hopes the deal would help the
company provide its logistics customers "with an end-to-end
services offering."
Write to Kathy Chu at kathy.chu@wsj.com
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