Hong Kong-based sourcing group, Li & Fung recently announced its first-half results for the current year in which the company has suffered a fall of 45 per cent in the profits. The company is claiming that the fall happened due to the constant changes in the retail trend and that this can also hamper their logistics business.
The apparel and toy manufacturer for Western retailers said in a statement issued that its profit came down to US $ 50 million during the first-half of the year (up to June) as compared to US $ 91 million during the same period previous year.
William Fung, Chairman, Li & Fung said: “We are careful about the quickly transforming retail scenario across the world and of the trade war uncertainties, which is why we are planning to keep on investing in our digital segment to be more competitive in the market.”
Reportedly, the company plans to list its logistics business in Hong Kong by the end of the first half of 2019, as this move is touted to increase the growth and boost up the financial flexibility of the brand.
Additionally, the company claimed that reason behind so many closures was that retailers are shifting towards the online market and as a retail compromising on their retail footprints and reducing the stock quantity.
Not only, the transformation in the retail industry but the growing uncertainties in global trade due to the US-China trade war could also affect the turnover. While Li&Fung has taken its production in over 50 countries to compensate for the expected loss due to this situation.
Fung further went on to elucidate that the company expects the destocking trend to continue until the retail industry settles into a fresh inventory balance. “It can be a process that may last for more than one year, which can spread out the impacts it will have on your business” Fung concluded.
Notably, the company registered a loss of US $ 0.62 billion in turnovers as the numbers tumbled down from US $ 6.47 billion to US $ 5.85 billion this year, whereas the core operating profit fell down to US $ 124 million from a restated $151 million.
Bharat Tex Special Report 2026 
