Li & Fung snaps up Shubiz
Global supply group Li & Fung has bought footwear supplier Shubiz for about £15 million to help offset the loss of its women’s footwear orders with Marks & Spencer, which it supplied via its Peter Black business.
Li & Fung is winding up the women’s division of Peter Black after M&S scaled back orders of core women’s footwear as part of its strategy to source more basic product direct.
Peter Black will continue to supply men’s footwear to M&S and Li & Fung hopes to rebuild its footwear operation following the purchase of Shubiz, which supplies women’s fashion footwear to M&S as well as Arcadia Group, Asda and Next.
Shubiz managing director Paul Lennard will remain at the London-based business.
Li & Fung European chief executive officer Dow Famulak said: “We wanted [to buy] a business that worked across retailers in the UK.”
Li & Fung’s sales rose 20% to HK$110.7 billion (£9.7bn) for the year to December 31.
Famulak told Drapers that Li & Fung was looking to make further acquisitions in the UK over the coming months. “If I had a focus, it would be apparel and accessories to compliment a significant footwear business,” he said.
Famulak added that Li & Fung was being impacted by the currency and credit insurance issues plaguing the wider industry.
“The reality is that the currency drop has been of a significant magnitude it has affected everyone. We have the ability to hedge [currency] and we are impacted less than smaller businesses but we have to work hard with our supply base to get retailers the price they want. The worse thing you can do at times like this is jump from supplier to supplier. It is much better to work with your current vendor base and ask questions like can we buy materials differently?”
On the credit insurance issue, he added that the size and scale of Li & Fung had helped offset the challenge of getting credit insurance cover on orders.
He added that out of the company’s UK sales, which amount to $400m (£274m), the company wrote of debt to the tune of $500,000 (£343,000) last year. “Last year it was about getting the next dollar,” he added. “Now you have to mind your business and be concerned about the quality of the next dollar you are getting.”
Dow Famulak is on the World Retail Congress (WRC) Grand Jury. WRC will be held in Barcelona, Spain, on May 6-8.