Bloomberg the Company & Products

Bloomberg Anywhere Login

Bloomberg

Connecting decision makers to a dynamic network of information, people and ideas, Bloomberg quickly and accurately delivers business and financial information, news and insight around the world.

Company

Financial Products

Enterprise Products

Media

Customer Support

  • Americas

    +1 212 318 2000

  • Europe, Middle East, & Africa

    +44 20 7330 7500

  • Asia Pacific

    +65 6212 1000

Communications

Industry Products

Media Services

Follow Us

Li & Fung Jumps After Calling 2013 a Solid Year: Hong Kong Mover

Don't Miss Out —
Follow us on:
Li & Fung Chairman William Fung
“We feel our responsibility is to play an even bigger role in bringing about and speeding up systematic, positive change in the industry,” William Fung, chairman of Li & Fung Ltd., said in a separate, e-mailed statement yesterday. Photographer: Jerome Favre/Bloomberg

Jan. 7 (Bloomberg) -- Li & Fung Ltd. rose the most in almost five months in Hong Kong trading amid speculation traders who had bet on the shares’ decline were buying them back after the company called its 2013 performance “solid.”

The world’s largest supplier of clothes and toys to retailers rose 9.6 percent to close at HK$10.78 in Hong Kong, the biggest gain since Aug. 15. The Hang Seng Index rose 0.1 percent.

Li & Fung, whose customers include Wal-Mart Stores Inc., and Target Corp., said in a statement yesterday that its 2013 performance was in line with its target to return to 2011 levels after net income fell last year for the first time since 2008. The supplier, which didn’t give a specific forecast, will probably report a 1 percent increase in profit for last year based on the average of 12 analyst estimates compiled by Bloomberg.

“The stock was heavily shorted ahead of the news so a lot of investors are now busy covering their short positions,” Andrew Sullivan, a sales director at Kim Eng Securities said by phone today.

The Hong Kong-based company will also start a new unit to help vendors improve factory safety after recent accidents in Bangladesh highlighted the need to improve working conditions, according to the company’s statement to Hong Kong’s stock exchange yesterday. The company will offer its suppliers services such as product testing and logistics support to factories, it said.

Vendor Support

The supplier got about 54 percent of its merchandise from China in 2012, while less than 10 percent came from Bangladesh, according to the company.

Li & Fung “will be reorganizing its vendor support services to focus more intensely on factory compliance following recent tragedies in the garment industry, as well as the on-going needs for stronger oversight,” the company said in the filing.

The company said it will announce a three-year plan including the factory compliance changes in March.

International clothing chains are under pressure to help improve conditions in Bangladesh’s $20 billion apparel industry after fires and the April collapse of the Rana Plaza factory complex that killed more than 1,100 people. Two groups led by U.S. and European retailers including Wal-Mart and Hennes & Mauritz AB agreed in November to improve work safety inspection standards there.

“We feel our responsibility is to play an even bigger role in bringing about and speeding up systematic, positive change in the industry,” Chairman William Fung said in a separate, e-mailed statement yesterday. Fung will himself lead the new unit, the company said.

To contact Bloomberg News staff for this story: Liza Lin in Shanghai at llin15@bloomberg.net; Vinicy Chan in Hong Kong at vchan91@bloomberg.net

To contact the editor responsible for this story: Stephanie Wong at swong139@bloomberg.net

Please upgrade your Browser

Your browser is out-of-date. Please download one of these excellent browsers:

Chrome, Firefox, Safari, Opera or Internet Explorer.