Li and Fung, Ltd. Building Strong Licensing
August 20, 2004
HONG KONG, China – Li and Fung Ltd., the giant sourcing firm based in Hong Kong is aggressively extending its market reach in the U.S. to survive the 2005 lifting of quotas on imports of textile and apparel products from developing nations to the U.S. imposed by the Multi-Fiber Agreement in 1974.
"We have been anticipating the issue for some time and we do not expect to have capacity or shortage issues," said Rick Darling, CEO of Li and Fung.
Dropping quotas is a mixed blessing, as China experienced in 2001 when the U.S. dropped quotas on luggage made from man-made fibers. China's market share soared from 13 percent to 62 percent but the unit price dropped from $13.51 to $5.23.
Experts expect the elimination of all quotas next year will increase China's market share in the U.S. apparel imports from its current level of 30 percent to 90 percent and drop import prices in U.S. about 15-20 percent. They say China will lead the pack of exporters to the U.S., and the significant drop in imported apparel prices is the logical result.
"…The obvious reason is quota rights cost money and average quota price probably represents about 15 percent of the total cost of the garment brought into the U.S. The second (reason) is the increased market efficiency due to orders going only to those countries and vendors that have the capability to be most efficient,'' said Darling
Li and Fung are prepared for the ups and downs of international trade, and are expanding in the both the area of ready-mades and garments in the U.S.
The company recently announced that it is finalizing licensing deals with Disney Consumer Products for Disney classic character plush toys, and Levi Strauss & Co Levi's® Red Tab™, and Levi's® Premium Red Tab™ men's tops.
"We are very serious about this new avenue of business and we are well on our way to establishing a strong portfolio of product licenses," Fung said. "The Group is still short of the current three-year plan target to double our profit by the end of 2004, but we remain committed to pursuing that goal. Orders on hand indicate an improved outlook for 2004 and we are targeting further acquisitions to augment our growth."
Li and Fung, Ltd., established in 1906, is one of the premier export trading companies of global consumer products, which manage the supply chain for high-volume, time-sensitive consumer goods, including garments, fashion accessories, toys, sporting goods, promotional merchandise, handicrafts, shoes, travel goods and household items. Their goods are manufactured through a sourced network of offices in almost 40 countries and territories for customers in the U.S., Europe, Asia, and the Southern Hemisphere.
"We have been anticipating the issue for some time and we do not expect to have capacity or shortage issues," said Rick Darling, CEO of Li and Fung.
Dropping quotas is a mixed blessing, as China experienced in 2001 when the U.S. dropped quotas on luggage made from man-made fibers. China's market share soared from 13 percent to 62 percent but the unit price dropped from $13.51 to $5.23.
Experts expect the elimination of all quotas next year will increase China's market share in the U.S. apparel imports from its current level of 30 percent to 90 percent and drop import prices in U.S. about 15-20 percent. They say China will lead the pack of exporters to the U.S., and the significant drop in imported apparel prices is the logical result.
"…The obvious reason is quota rights cost money and average quota price probably represents about 15 percent of the total cost of the garment brought into the U.S. The second (reason) is the increased market efficiency due to orders going only to those countries and vendors that have the capability to be most efficient,'' said Darling
Li and Fung are prepared for the ups and downs of international trade, and are expanding in the both the area of ready-mades and garments in the U.S.
The company recently announced that it is finalizing licensing deals with Disney Consumer Products for Disney classic character plush toys, and Levi Strauss & Co Levi's® Red Tab™, and Levi's® Premium Red Tab™ men's tops.
"We are very serious about this new avenue of business and we are well on our way to establishing a strong portfolio of product licenses," Fung said. "The Group is still short of the current three-year plan target to double our profit by the end of 2004, but we remain committed to pursuing that goal. Orders on hand indicate an improved outlook for 2004 and we are targeting further acquisitions to augment our growth."
Li and Fung, Ltd., established in 1906, is one of the premier export trading companies of global consumer products, which manage the supply chain for high-volume, time-sensitive consumer goods, including garments, fashion accessories, toys, sporting goods, promotional merchandise, handicrafts, shoes, travel goods and household items. Their goods are manufactured through a sourced network of offices in almost 40 countries and territories for customers in the U.S., Europe, Asia, and the Southern Hemisphere.
