Home / Knowledge / News / Apparel/Garments / Logistics business at Li & Fung up double-digit in 2018

Logistics business at Li & Fung up double-digit in 2018

22
Mar '19
Pic: Li & Fung
Pic: Li & Fung
The logistics business at Li & Fung, a leading supply chain solutions partner for brands and retailers, has continued to grow organically in double-digit during fiscal 2018. With strong demand for incountry logistics services, turnover and core operating profit (COP) increased 10.2 per cent and 14.6 per cent to $1.13 billion and $86 million respectively.

The growth of the Logistics business continued to be driven by strong growth momentum in China with e-logistics growth, accelerating growth in ASEAN across all services; and rapid expansion in the newer geographies of Japan, Korea and India. To further accelerate the pace of its growth, preparation is underway for the potential spin off and separate listing of LF Logistics to take place in 2019 depending on market conditions and other factors.

The group turnover decreased 6.2 per cent to $12.7 billion, mainly due to customers’ ongoing destocking, customer turnover and bankruptcies. Total margin percentage improved by 0.4 per cent to 10.6 per cent, primarily a result of the increased contribution from the higher-margin Logistics business.

In 2018, the company was affected by the rapidly changing retail landscape, with record store closures and customer bankruptcies. Owing to the company’s investments in a speed-enabled supply chain, its customers have been able to reduce their inventory levels, although this produced short-term negative impacts on the company’s turnover. The ongoing US-China trade war had a minimal impact on Li & Fung’s business due to the company’s diversified sourcing network outside of China.

"2018 was a demanding year and we’ve made a fundamental reorganization of our business in line with our Three-Year plan to build the Supply Chain of the Future. We initiated a structural change with a new management team to focus on our core customers and operational excellence. This includes a new Group President, a new Chief Operating Officer and an entirely new Chief Digital Officer position. We have the right strategy, and now the right structure and people in place. With all three elements in place we have built the right foundation for the future. I am confident that we are on the right track," Spencer Fung, Group CEO of Li & Fung, said.

"The strong organic growth of LF Logistics is due to active engagement with our people and close collaboration with our customers. At Li & Fung, we are well positioned to integrate logistics with our traditional sourcing and supply chain solutions offering. This provides a faster and more digital supply chain, enabling us to cultivate closer and longer-lasting customer partnerships. We are pursuing market share gain and pipeline conversion as the twin drivers for our growth," Joseph Phi, group president of Li & Fung, said.

"Phi has a strong track record having organically grown LF Logistics over the past decade. In his new role, Joseph will focus on account management and business development. As a team, we are focused on driving greater productivity in our global production platform by truly leveraging the scale of Li & Fung for our customers, capitalizing on our clear leadership in 3D design, and accelerating the build-out of our end-to-end digital platform. These initiatives are already helping to strengthen relationships with core customers and to convert new customers," Fung continued.

"With ongoing trade uncertainties, we continue to help existing and new customers optimize their production across over 50 countries of export. This provides the best defense against fluctuations in trade policy and mitigates any negative impact from tariff increases. I am confident that our new leadership team and organisational structure will help us drive productivity, strengthen customer relationships and, in turn, grow market share," group chairman, William Fung said. (RR)

Fibre2Fashion News Desk – India


Must ReadView All

Pic: Shutterstock

Retail | On 9th Jul 2020

UK unveils 2nd part of 3-phase plan for economic recovery

Chancellor of the exchequer Rishi Sunak recently announced a slew of...

Pic: lentamart / Shutterstock.com

Apparel/Garments | On 9th Jul 2020

Brooks Brothers files Chapter 11 bankruptcy proceedings

Brooks Brothers, America's oldest apparel company, recently announced ...

Pic: Sorbis / Shutterstock.com

Apparel/Garments | On 9th Jul 2020

Bangladesh apparel exports down 18.12% in FY20

Readymade garment exports from Bangladesh decreased by 18.12 per cent ...

Interviews View All

Amrit Sethia, SOIE

Amrit Sethia
SOIE

‘The intimatewear category in India is slowly becoming trend-sensitive.’

Textile Industry, Head honchos

Textile Industry
Head honchos

African fashion has a strong identity

Textile Industry, Head honchos

Textile Industry
Head honchos

Cooperate and collaborate for greater good

Wesly Clements,

Wesly Clements

US-based Baldwin Technology Company is a global manufacturer and supplier...

Deepprakash Agrawal,

Deepprakash Agrawal

Radhey Weaves is a Surat-based manufacturer of brocade fabrics. MD...

Devendra Gupta,

Devendra Gupta

Reforce, a start-up based in Gurgaon, aims to revolutionise the fitness...

Thomas Ong P S, NanoTextile

Thomas Ong P S
NanoTextile

Malaysian company NanoTextile Sdn Bhd taps into the potentials of...

Daniel Odermatt, Ventile

Daniel Odermatt
Ventile

Ventile is a registered trademark used to brand a special high-quality...

Isabel Herranz, European School of Business & innovation

Isabel Herranz
European School of Business & innovation

Cutting-edge ideas like the Internet of Things and artificial intelligence ...

Sweta Agarwal, A Humming Way

Sweta Agarwal
A Humming Way

A Humming Way (AHW) is inspired by the old-world regalia of Rajasthan...

Anjali Bhaskar, Samatvam

Anjali Bhaskar
Samatvam

Anjali Bhaskar has an experience of 12 years in the fashion industry. She...

Nisha Chanda, Whistling Woods International School of Fashion

Nisha Chanda
Whistling Woods International School of Fashion

<div>A lack of upgraded courses in costume designing and fashion as per...

Press Release

Press Release

Letter to Editor

Letter to Editor

RSS Feed

RSS Feed

Submit your press release on


editorial@fibre2fashion.com

Letter To Editor






(Max. 8000 char.)

Search Companies





SEARCH

Leave your Comments


July 2020

Subscribe today and get the latest update on Textiles, Fashion, Apparel and so on.


Advanced Search