Li & Fung a step closer to spin-off listing for its Global Brands business

Spin-off listing of the consumer brands and licensing division to be vetted by HK exchange

PUBLISHED : Thursday, 22 May, 2014, 1:19am
UPDATED : Thursday, 22 May, 2014, 6:18pm

Supply-chain manager Li & Fung said the Hong Kong stock exchange had agreed to undertake a detailed vetting of the separate listing of its brands business, moving the firm a step closer to a spin-off first mooted in March.

The world's largest supplier of clothes and toys to Western retailers including Wal-Mart Stores and Target yesterday announced in a statement that the local bourse would do a detailed vetting of its proposed spin-off listing of the consumer brands and licensing division, called Global Brands Group, after an initial three-day review.

After the planned IPO, Li & Fung said "it will not retain any interest in the issued share capital of Global Brands Group and Global Brands Group will no longer be a subsidiary of the company."

Li & Fung will be focused on sourcing and logistics services to wholesale and retail customers.

"We hope that within the next 60 to 90 days we can list on the stock exchange," chairman William Fung Kwok-lun said last week at the company's annual shareholders' meeting.

Bruce Rockowitz, the chief executive of Li & Fung, will become the vice-chairman and chief executive of Global Brands, while Spencer Fung, the chief operating officer of Li & Fung and nephew of the chairman, will be taking over at the Hong Kong trading house from Rockowitz.

Global Brands includes brands such as Juicy Couture, Coach and J. Lo by Jennifer Lopez.

According to the preliminary listing documents, the spin-off unit generated annual sales of US$3.3 billion last year and had earnings before interest, tax, depreciation and amortisation of US$295.8 million for the same period.

Separately, the Economist Intelligence Unit's latest ranking of the world's most investor-friendly locations had Singapore keeping the top spot.

It was followed by Switzerland and Hong Kong. The survey measures the business environment quality in 82 locations.