Chinese sourcing giant and brand group Li & Fung has returned to a net profit of $21m (£17.2m) in the six months to 30 June, compared with an $86m (£70.7m) net loss in the same period last year.
Turnover decreased by 8.4% to $5.4bn (£4.4bn), which Li & Fung blamed on “ongoing destocking, customer turnover and customer bankruptcies, as brands and retailers continue to face pressure on sales and margins”.
Core operating profit also took a downturn, falling by 18.5% to $105m (£86.5m) because of ”a decrease in turnover and total margin in the Supply Chain Solutions business, and continued investment in digitalisation in line with the company’s long-term plan”.
Wholesale business decreased by 9% as a result of restructuring, particularly in the UK.
Spencer Fung, group CEO, said, “The new management team has been focused on restructuring the company and all operational KPIs [key performance indicators] are now improving for both our customers and suppliers. We are starting to gain momentum, and winning market share and new customers due to our operational excellence, global diversified network and 3D virtual design services. As a result, turnover decline is stabilising and beginning to bottom out.”