Li &Fung, Liz Claiborne ink sourcing pact
With the agreement, the Hong Kong-based global consumer goods exporter will take over the entire sourcing operation of the US based apparel company for all brands in the Liz Claiborne portfolio.
This includes Mexx, Lucky Brand, Juicy Couture, Kate Spade, and Isaac Mizrahi with the exception of the jewellery product lines.
The arrangement will start in the first quarter of this year, with Liz Claiborne paying a commission on all goods sourced by Li & Fung thereafter.
William McComb, CEO of Liz Claiborne said, "Managing our large, complex sourcing strategies and teams throughout Asia in a cost effective and brand appropriate manner from the US does not offer the flexibility we need to meet the demands of our consumers efficiently."
McComb continued, "With Li & Fung as a partner, our brands will have access to a vast, worldwide network of manufacturing partners and best-in-class systems, management and talent which [will] give us more flexibility and a better competitive position."
Bruce Rockowitz, president of Li & Fung, said, "This is a very strategic outsourcing deal for Li & Fung. [With the addition] of prestigious brands like Kate Spade, Juicy Couture and Lucky Brand, the deal [will] helps us to gain market share and in a very difficult market [and] undoubtedly attract more outsourcing deals to Li & Fung in the future."
As part of the arrangement, Li & Fung will take over all sourcing operations and pay Liz Claiborne US$75 million followed by a further US$8 million upon completion.