Li & Fung Limited, the world’s leading supply chain solutions partner, has announced a joint venture (JV) with South Ocean Knitters Holdings Limited. South Ocean is one of the world’s leading exporters and manufacturers of knitwear. The JV, Cobalt Fashion Holding Limited, will be owned 62 per cent by Li & Fung and 38 per cent by South Ocean.
The JV will combine the operations and resources of Li & Fung’s sweater vertical together with South Ocean’s knitwear business to become one of the largest and most innovative knitwear suppliers globally.
It combines the strengths of South Ocean’s yarn development and manufacturing knowhow with Li & Fung’s product design and supply chain innovation. The total turnover of the JV is about $700 million. The JV will service brands and retailers at all price levels and in all segments, covering the US, UK, Europe, Japan and other Asian markets.
Silas Chou, president and CEO of Novel Enterprises Limited, the parent company of South Ocean, well known for building billion-dollar brands Tommy Hilfiger and Michael Kors, is confident that this partnership is an important milestone for the global knitwear industry.
“South Ocean is one of the most established knitwear companies in Asia with over 40 years of experience in supplying the world’s top brands and retailers with beautiful, functional and innovative knitwear,” said Silas Chou. “We see tremendous synergies in the joint venture with Li & Fung. Together, we will be driving innovation in the industry and delivering value to our customers.”
“We are excited to join forces with South Ocean,” added William Fung, Group chairman, Li & Fung. “We both have a long history and solid track record, with a strong foundation of product innovation and expertise. Given our access to the world’s leading fashion brands and retailers, we have first-hand insight into how knitwear and its supply chain can be transformed to best suit today’s fast-changing apparel market.”
“We have been steadily investing in deepening our product expertise across our three product verticals: sweaters, beauty and furniture since 2015. With this JV with South Ocean we aim to be not just the largest in the knitwear industry, but the best-in-class,” said Fung.
Closing of the transaction, and establishment of the JV, will take place once the necessary regulatory approvals have been obtained, Li & Fung said in a release. (RKS)
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