Press releases

• Joint venture aims to transform China’s retail industry through enhancing supply chain efficiency
• Deal extends global supply chain into a retail network serving China’s growing middle class

Hong Kong, 23 June 2015 – Li & Fung Trading (China) Holdings Ltd., a wholly-owned subsidiary of Li & Fung Limited (“Li & Fung”, “the Company”, SEHK: 494), today announced a strategic partnership with two of China’s largest retail groups, Shanghai Bailian Group Co. Ltd. (“Bailian Group”) and Beijing Wangfujing Department Store (Group) Co. Ltd. (“Wangfujing Department Store”), with the establishment of a joint venture (“JV”) in the Shanghai free trade zone. A signing ceremony was held at Shanghai Expo Centre with the presence of Chen Xiao Hong, Group Chairman of Bailian Group, Madam Liu Bing, Group Chairman of Wangfujing Department Store and William Fung, Group Chairman of Li & Fung.

The JV is owned by Bailian Group (40% stake), Wangfujing Department Store (40% stake) and Li & Fung (20% stake). Under the terms of the partnership, Li & Fung will provide expertise to design, source and produce private labels and licensed brands tailored to the requirements of Bailian Group and Wangfujing Department Store. The JV combines the strengths and capabilities of two of China’s largest retailers, Bailian Group and Wangfujing Department Store and global supply chain manager, Li & Fung.

Amid increasing competition in a fast-evolving retail landscape and growing importance of e-commerce, Chinese multi-brand retailers are looking to develop private and proprietary brands so as to differentiate themselves from competitors, increase margins and improve customer loyalty.

The key business of the JV includes facilitating the development and management of private labels and licensed brands. In the first three-year plan, the JV will focus on the development of product categories including menswear, womenswear, children’s wear and home products. It will develop 1 to 3 private labels and up to 6 licensed brands over this three year period, and may involve the opening of up to 300 stores or store-in-stores and realize up to 1 billion yuan in sales.

In the long run, the JV aims to be at the forefront of a new breed of brand development and management companies giving strong own-brand capabilities to traditional retailers that will contribute to the transformation and sustainable development of China’s retail industry.

“We are excited to join forces with two of China’s largest retail companies to bring forth the transformation of China’s retail industry. Through this strategic partnership, Li & Fung is able to extend the global supply chain into a substantial retail network that serves a large growing middle class in China,” said William Fung, Group Chairman of Li & Fung.

“Through the introduction of private brands and exclusive brands, the joint venture will enable its retail partners to effectively increase its competitiveness by offering a different and cost effective product offering. The joint venture also aims to introduce globally sourced products that offer Chinese consumers a wider variety of foreign goods,” William added.

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