With 20 per cent stake, Hong Kong based Global exporter Li & Fung Ltd has formed a joint venture (BaiFuLi Co Ltd,) with two Chinese department store operators Beijing Wangfujing Department Store Group Co Ltd and Shanghai Bailian, with the aim of setting up as many as 300 stores and developing its own private labels. Both Chinese companies will hold a 40 per cent stake. BaiFuLi will have a registered capital of US $ 7.7 million. William Fung, Group Chairman of Li & Fung said, “Through this strategic partnership, Li & Fung is able to extend the global supply chain into a substantial retail network that serves a large growing middle class in China.” The venture aims to develop between one and three private labels and up to six licensed brands over a three-year period, it added. This could see the venture opening up to 300 stores and pulling in up to US $161 million in sales.
It will help Li & Fung to make up for some of the business it recently lost from US retail giant Wal-Mart Stores Inc. Li & Fung reported an 11.8 per cent fall in 2014 net profit in March.
