Li & Fung Reports 2012 Results
Hong Kong-based Li & Fung Limited announced that in line with the company’s profit warning announced on January 11, 2013, core operating profit declined by 42 percent to $511 million in 2012, largely due to the cost of restructuring LF USA’s business and the reduction in the number of brands distributed in the U.S. Profit was $617 million for 2012 down from $681 million in the prior year, representing a decrease of 9.4 percent compared to 2011.
“We recognized that our biggest management challenge was the restructuring of LF USA, which became more costly than originally envisioned,” said Bruce Rockowitz, group president and CEO of Li & Fung Limited, in a statement. “We took swift, decisive action to address the issue and also introduced strict cost control measures across the company. We target to realize the benefits of these measures by this year. Meanwhile, we are putting into place the optimum organization to support the business of LF USA for the longer term.”
He added that, “The company’s revenues tend to be skewed towards the second half of the year, which is traditionally when consumers in Western markets spend the most. This is no exception for this year as our customers assess economic trends and observe prevailing market conditions,” he said.
Rockowitz said that the global economic environment in 2012 had been more demanding than expected and the retail business was impacted by lackluster consumer sentiment in the U.S. and Europe.
“Despite this market condition, we are encouraged by the number of new customers attracted to us for the scale and depth of our operations. We believe the trend for outsourcing will continue as more and more retailers and fashion brands appreciate the competitive advantages offered by one-stop-shop supply-chain solutions,” he said.
Simba Dickie Group Acquires Märklin
The Simba Dickie Group announced that its Sieber & Sohn GmbH & Co. KG, acquired model railway manufacturer Märklin. Through Sieber & Sohn GmbH & Co. KG, Michael Sieber will become the new majority shareholder at Märklin.
Under the takeover agreement, Florian Sieber will join the current dual leadership of the company as the third managing director of equal rank, working alongside Wolfrad Bächle and Stefan Löbich.
The Märklin headquarters in Baden-Württemberg will remain the center for development and production. Györ, Hungary, will remain the centerpiece of the company’s core production. Additional production lines will return to Europe from China in the near future, according to a statement from the company.