Global sourcing firm Li & Fung reported a 33.4 percent increase in first-half profits on Thursday, boosted by continued growth in core trading customers and strong logistics performance as well as the low comparative base in the year-ago period from the Global Brands spin-off.
The Hong Kong-based company said that despite downward pressures from the deflationary environment and a weak Euro, profits grew to $149 million. Total turnover decreased by 1 percent to $8.63 billion, with turnover in trading business shrinking 2.5 percent, while the logistics business continued its growth trajectory, surging 36.3 percent.
Group Chairman William Fung said the Vendor Support Services business—announced last year in a three-pronged strategy intended to improve the company’s future growth prospects—is ahead of schedule.
“Hence, we are pleased to see that our investment made for this three-year plan have begun to yield benefits,” he said in a statement, adding that the system has helped the company’s customers cope with the ongoing trend of moving production out of China into less developed markets.
Spencer Fung, group chief executive officer, noted that the emergence of e-commerce has created a new set of challenges for global brands and retailers. “We believe omnichannel is the future of retailing success,” he said. “Consumers are no longer limited by how, when and where they buy products. They are also demanding that these products are unique and sustainable. As a result, our customers require higher degrees of product differentiation to remain competitive than ever before.”
He added, “We believe that by focusing on product expertise, applying innovation to design and development and continuing to build our multi-channel sourcing business model, we will be the company best positioned to help our customers succeed at a time when the global retail industry is evolving.”