Li & Fung acquires cosmetics, fashion companies
Updated: 2010-07-09 07:22
(HK Edition)
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Li & Fung Ltd, the biggest supplier to retailer Walmart Stores Inc, has paid about $140 million for health and beauty, jeans and fashion accessories companies as it seeks expansion in the US, its biggest market.
The Hong Kong blue-chip trading firm bought Jackel Group, which it said services the beauty industry in packaging, fragrance and personal care, and HTP Group, a jeanswear company. It also acquired Cipriani Accessories Inc, which it described as a designer, distributor and importer of accessories in the US, Canada and Mexico.
Li & Fung also signed four licensing deals in the "last few months," it said in an emailed statement Thursday. The acquisitions will be paid for with cash reserves, it said, without providing further details on the transactions.
Retailers' sales in the US, where Li & Fung derived 64 percent of last year's HK$104.5 billion ($13.4 billion) of sales, are growing at the fastest pace in four years. The company that supplies clients with consumer goods including clothes, toys and furniture has said it would focus on footwear as well as on health and beauty companies.
"The deals will further solidify our market share in their respective areas and will contribute positively to our bottom line in the long run," President Bruce Rockowitz said in the statement. "We expect more deals to come."
Li & Fung plans to expand its operations further by acquisitions in the coming years, Rockowitz told media earlier this year when the company released its annual results for last year. The pipeline of deals remains very strong, and many of them focus on the high-potential health and beauty, footwear and European onshore businesses, he said at that time.
The group currently operates a sourcing network of over 80 offices covering over 40 economies across North America, Europe and Asia, supplying a huge volume of consumer goods to major retailer chains in the US and European markets.
Li & Fung rose 1.9 percent to HK$35.20 in Hong Kong trading Thursday before the announcement.
Bloomberg News
(HK Edition 07/09/2010 page3)