Li & Fung Ltd. posts 17 percent increase in net profit

Nathan Andrada – Fourth Estate Cooperative Contributor

Hong Kong, China (4E) – Li & Fung Ltd. said net profit jumped 17 percent last year, boosted by a rebound in its U.S. distribution business.

The sourcing company reported Thursday a net profit of $725.3mn, a gain from $617.4mn in the previous year. Revenue climbed 3 percent to $20.75bn from $20.22bn.

The Hong Kong-based Li & Fung said it generated more business in the final months of 2013, as orders increased during the holiday shopping season. The company has also been restructuring its struggling product design and marketing business, LF USA.

The company, which is a buying agent for retailers such as Target Corp. and Wal-Mart Stores Inc., continues to be susceptible to the global economic weakness, as well as efforts by retailers to work directly with factories and remove middlemen. In 2012, Wal-Mart canceled much of a deal that would have made Li & Fung a supplier of goods for retail giant’s overseas stores.

Li & Fung, a major middleman in the worldwide apparel supply chain, has been moving away from product distribution toward purchasing of consumer-goods brands to expand its logistics and freight-forwarding operations.

In 2013, the company bought Lornamead Acquisitions Ltd., U.K.-based owner of Finesse shampoo, in a $190mn deal.

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