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Textile retailer ties up with sourcing company Li & Fung
03 Oct '06
2 min read
Europe's leading department store KarstadtQuelle AG and Li & Fung Ltd, the worldwide largest sourcing company registered in Hongkong, signed the contract on the future cooperation. Li & Fung takes over KarstadtQuelle`s entire international sourcing business.
The former sourcing organisation, which has been consolidated under KarstadtQuelle International Services AG (St. Gallen), is taken over including its c. 1,000 employees. Both parties agreed on silence regarding the purchase price. The transaction is with reservation of the approval of the competition authorities.
“The signing of contract means for us a further milestone in the development of the group.With the hand over of the international sourcing activities to the worldwide leading sourcing company and our focussing on design, assortment and presentation of merchandise, we act in our business more professionally”, said Prof. Dr. Helmut Merkel, Member of the Management Board of KarstadtQuelle AG and head of purchasing, logistics and IT.
“Furthermore, we benefit from a relevant 500 m Euros reduction of the working capital, a prolonging of the payment terms to 120 days and significant effects due to the purchase price reductions from 5 to 10 percent on average. 2008, a total direct sourcing volume of 2 bn Euros should be handled by Li & Fung.”
Due to the newly gained flexibility, KarstadtQuelle – Germany`s largest textile retailer – will increase the number of collections up to twelve a year and therefore strongly improves its competitiveness in the future.
To differentiate from the competitors the business will be strengthened effectively with own brands and competence in design and development. Both in Germany and in Asia own design-and development centers will be established.
Li & Fung Ltd has a long time experience as a sourcing partner of international companies like Marks & Spencer, Wal Mart, Coca Cola or Nike.
The former sourcing organisation, which has been consolidated under KarstadtQuelle International Services AG (St. Gallen), is taken over including its c. 1,000 employees. Both parties agreed on silence regarding the purchase price. The transaction is with reservation of the approval of the competition authorities.
“The signing of contract means for us a further milestone in the development of the group.With the hand over of the international sourcing activities to the worldwide leading sourcing company and our focussing on design, assortment and presentation of merchandise, we act in our business more professionally”, said Prof. Dr. Helmut Merkel, Member of the Management Board of KarstadtQuelle AG and head of purchasing, logistics and IT.
“Furthermore, we benefit from a relevant 500 m Euros reduction of the working capital, a prolonging of the payment terms to 120 days and significant effects due to the purchase price reductions from 5 to 10 percent on average. 2008, a total direct sourcing volume of 2 bn Euros should be handled by Li & Fung.”
Due to the newly gained flexibility, KarstadtQuelle – Germany`s largest textile retailer – will increase the number of collections up to twelve a year and therefore strongly improves its competitiveness in the future.
To differentiate from the competitors the business will be strengthened effectively with own brands and competence in design and development. Both in Germany and in Asia own design-and development centers will be established.
Li & Fung Ltd has a long time experience as a sourcing partner of international companies like Marks & Spencer, Wal Mart, Coca Cola or Nike.
KarstadtQuelle AG
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