Li & Fung partners with China department store chains

Hong Kong – A subsidiary of global export company Li & Fung is partnering with two Chinese department store retailers to open as many as 300 stores in the Shanghai free trade zone. Li & Fung Trading (China) Holdings Ltd. is forming a joint venture with Shanghai Bailian Group Co. Ltd. and Beijing Wangfujing Department Store (Group) Co. Ltd. Li & Fung holds a 20% stake and each department store chain owns a 40% stake.



Under the terms of the partnership, called BaiFuLi, 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 venture will facilitate the development and management of private labels and licensed brands. In the first three-year plan, the venture will focus on the development of product categories including menswear, womenswear, children’s wear and home products.



It will develop one to three private labels and up to six licensed brands during a three-year period, and may involve the opening of up to 300 stores or store-in-stores and up to $161 million in sales.



“We are excited to join forces with two of China’s largest retail companies to bring forth the transformation of China’s retail industry,” said William Fung, group chairman of Li & Fung. “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.”



Li & Fung recently lost some of its retail business. Both Wal-Mart and Kate Spade decided to stop sourcing some product sold in China from Li & Fung.