Li & Fung touts benefits of Hong Kong for new Global Brands Group
Li & Fung chief executive Bruce Rockowitz says its global network and base in Hong Kong will be the biggest competitive edge for its planned spin-off firm Global Brands Group, which will focus on helping US brands in the "masstige" - prestige fashion for the mass market - sector expand in Asia.
"It's a much better place to base yourself. We have China on the doorstep. A lot of brands are coming to us because really we're the only company that's global … It's hard to find a company you can licence multi-categories in the fashion space globally. That's a unique platform," Rockowitz said.
"[It's] a very high growth company focused on taking American brands globally. Europe is very focused on luxury brands," he said.
"In the US, that's where all the brands below luxury come from in the world. With the opening up of China, there's a huge opportunity and in Asia to globalise brands."
On Wednesday night, the stock exchange accepted the formal application for the spin-off and began the vetting process.
Shares of the proposed company will be distributed in specie rather than a chain listing. Li & Fung will not have any ownership in the spin-off.
Rockowitz said the landscape was not too competitive with few firms dedicated to the licensing side. "We [are] about the sixth or seventh largest in the US by sales. In that top 12, there are four companies doing licensing like us," Rockowitz said. "All the other companies are our partners, meaning we licence from them."
Global Brands will compete with Luxottica, a leader in eyewear, Fossil, the largest licensee for watches, beauty-specialised licensee Coty, and The G lll Agency, which operates in a similar space but is smaller.
Li & Fung's brands division encompasses 350 brands with 80 per cent of them hailing from the US. Character brands including for Disney and Nickelodeon make up 250 while fashion brands like Cole Haan, Juicy Couture, Tommy Hilfiger and Calvin Klein are among the other 100.
The firm said in March that its new three-year target was to more than double the operating income for the consumer brands division from US$134 million, mainly driven by organic growth.
Spencer Fung, currently the chief operating officer and the eldest son of honorary chairman Victor Fung Kwok-king will assume the role of chief executive when Rockowitz goes to head up the new listed company.
"The last 13 years he's been very much been groomed to take my place," Rockowitz said. "This has been a long, long transition--almost from the day I got into this company. He's the right age, he has the right training and been all over the world working for Li & Fung."