“Retailers are extremely challenged right now,” said the group chief executive of Li & Fung, Spencer Fung, today, as the global supply group revealed lower order volumes for the first six months of the year.
“They are grappling with the impact of ecommerce, a pervasive promotional environment and high levels of inventory … 2016 is one of the toughest trading periods we have ever seen,” he added.
Group turnover fell 6.4% to $8.1bn (£6.1bn), while operating profit fell by 14.2% to $156m (£118m).
Li & Fung is putting in place a three-year plan that will focus on speed, innovation and digitisation of the supply chain, running to 2019.
Group chairman William Fung said: “The retail environment continues to be very weak. In the first half of 2016 we have seen disruption to production markets, an uncertain trade policy environment and historically low freight rates.”
“Despite the difficult trading conditions and external environment, we are focused on what we can control and are executing strategies to position Li & Fung for the long-term,” continued Spencer Fung.
“We are gaining share of wallet with our existing customers. Our operating and business development efforts are gaining traction and our investment in high growth areas is yielding returns. We are winning new customers and there is a strong pipeline of new business.
“We have a solid foundation for our business, on which we will continue to build,” he concluded.
In March, the group reported full-year operating profits fell 15.2% to $512m (£353m), while total sales slipped 2.4% to $18.8bn (£12.9bn) for the 12 months to 31 December, compared with the previous year.