Li & Fung’s like-for-like profits dropped 19% in the first half of the year due to a mixture of ”destocking, store closures and bankruptcies”.
The Hong Kong-based firm, which offers supply chain solutions for brands and retailers, revealed that for the six months to 30 June, core operating profit fell 18% to $124m (£96.1m), due to global shifting retail trends.
Turnover decreased by 9.6% to $5.6bn (£4.3bn), with total margin as a percentage of revenue standing at 10.5%. Despite facing global retail headwinds, the firm’s logistics business reported a 10.9% rise in turnover to $543m (£420m), with Li & Fung announcing plans to float the division as a separate entity on the Hong Kong Stock Exchange.
Spencer Fung, group chief executive of Li & Fung said: “Our customers continued to face a constantly changing retail environment and that in turn affected our performance in the first half. We have announced an aggressive plan to bring greater focus on customers, business development, production platform and digital initiatives.
“Our speed and digital modules have helped our customers achieve better operational results by increasing sell-through, reducing mark-downs and improving inventory levels, and we want to accelerate our digital strategy”.