Li & Fung Limited, the world’s leading multinational consumer goods sourcing, logistics, and distribution group, announced an important milestone with the acceptance for review of its listing application (“Form A1”) to The Stock Exchange of Hong Kong Limited for the listing of Global Brands Group Shares on the Main Board of the Stock Exchange.

 

Li & Fung Limited, the world's leading multinational consumer goods sourcing, logistics, and distribution group, announced an important milestone #

The application is now subject to the approval of the Stock Exchange and, if successful, will result in the listing of Global Brands Group. The listing of Global Brands Group Shares will be by way of a 100 per cent distribution in specie with no capital market fundraising activities, whereby each Li & Fung shareholder will receive one Global Brands Group share for every share it owns in Li & Fung. 

 

Li & Fung Limited, the world's leading multinational consumer goods sourcing, logistics, and distribution group, announced an important milestone #

Clear Rationale for the Spin-Off 

The intention to spin-off and list Global Brands Group as a separate publicly-listed entity was announced on 20 March 2014 at the same time the new Three-Year Plan was unveiled. At that time, the Company announced the reorganization of the distribution network by aligning the private label business to the trading business and creating the new standalone Global Brands Group, which consists of the brands and licensing businesses. The decision to spin-off and list Global Brands Group is a natural extension of this strategic realignment. 

 

Li & Fung Limited, the world's leading multinational consumer goods sourcing, logistics, and distribution group, announced an important milestone #

Given the separate needs and different business models of Li & Fung and Global Brands Group, creating two companies will enable the management of each to pursue their own specific and focused strategy. Li & Fung will be able to concentrate on its sourcing and logistics focus, which requires sourcing skills and product development and supply chain management for retailers and brands globally. On the other hand, Global Brands Group requires fashion-forward design capabilities as well as brand development, licensing, and marketing skills. 

 

Li & Fung Limited, the world's leading multinational consumer goods sourcing, logistics, and distribution group, announced an important milestone #

Significant Benefits to Both Businesses 

Creating two companies will bring significant benefits to both Li & Fung and Global Brands Group. Both Li & Fung and Global Brands Group will be able to grow faster by operating separately and executing their distinct growth strategies. Each company will also have enhanced financial flexibility when running the different businesses that have distinct capital allocation needs. 

 

Li & Fung Limited, the world's leading multinational consumer goods sourcing, logistics, and distribution group, announced an important milestone #

For Li & Fung, this will allow for a simplification of the business and will help the Company streamline operations into its core areas. Li & Fung will also continue to benefit from Global Brands Group’s growth through a seven year sourcing agreement. 

 

Li & Fung Limited, the world's leading multinational consumer goods sourcing, logistics, and distribution group, announced an important milestone #

For Global Brands Group, an uninterrupted focus on the brands business will allow its management team to fully build out the business and leverage a new dedicated capital structure able to fund its further growth and development.