Li & Fung’s parent and Sanrio are seeking to develop products for the global market and cut logistics costs, Sanrio said in a statement today. Katherine Wang of GolinHarris, the public relations agency hired by Li & Fung, said the brothers invested through closely held Fung Investment Pte. Ltd.
Sanrio, which consigns 10 percent of its character-goods production to Li & Fung, plans to raise the ratio to about 30 percent in three years, Nikkei English News reported, without citing anyone. Li & Fung, the biggest supplier to retailers including Wal-Mart Stores Inc., is considering acquisitions in Japan as it expands in Asia to pare reliance on U.S. sales.
The billionaires are the biggest shareholders in Hong Kong- listed Li & Fung Ltd. and control closely held Li & Fung Group.
Bruce Rockowitz, president of the listed company, has said he’s looking at clothing, accessories, bags and shoes as he considers possible purchases in Japan. Li & Fung Ltd. has won court approval for its more-than HK$7 billion ($902 million) offer for Integrated Distribution Services Group Ltd. to gain a logistics network in China.
Clothes, Toys, Cars
“This signals that the Fung brothers seek to work closer with” Sanrio, Matthew Marsden, a Hong Kong-based analyst at Samsung Securities Co., said in an e-mail today. “At a later stage, Li & Fung may even distribute Hello Kitty in China.”
Victor Fung is chairman of Li & Fung Ltd. and is Hong Kong’s 10th-richest person with a net worth of $2.9 billion, according to Forbes Asia. William Fung is the listed company’s managing director and is worth $3 billion, making him the city’s ninth-richest person.
Sanrio-branded products include clothes and accessories, toys, video games, jewelry and mini cars. The Tokyo-based company said it plans to strengthen business ties with Li & Fung Group, without elaborating.
Li & Fung Ltd. dropped 0.8 percent to HK$42 in Hong Kong trading today. The stock has climbed 30 percent this year, compared with a 7.2 percent gain for the benchmark Hang Seng Index. Sanrio rose 0.6 percent to close at 1,655 yen in Tokyo trading and has more than doubled in market value this year.
In July, Sanrio raised its net income forecast 31 percent to 6.2 billion yen ($76 million) for the year ending March because of higher revenue from licensing characters, which also include My Melody and Little Twin Stars.
Li & Fung Group was founded as a porcelain and silk trader in southern China in 1906, during the Qing dynasty. Affiliates include Li & Fung Ltd., luxury retailer Trinity Ltd., Integrated Distribution Services and Toys “R” Us Asia.
To contact the editor responsible for this story: Frank Longid at email@example.com