* Sees deal as long-term strategy, expected to grow strongly
* European business on track for three-year plan
HONG KONG Jan 28 Consumer goods exporter Li &
Fung Ltd (0494.HK) said it has entered into a sourcing agreement
to supply Wal-Mart (WMT.N) with goods valued at $2 billion in the
first year, and expected to grow after that.
"It is expected that the group will benefit from the sourcing
arrangement described through an enhancement of profitability,"
Li & Fung said in a statement to the Hong Kong Stock Exchange on
Li & Fung said the sourcing arrangement was non-exclusive and
did not contain any sourcing volume commitments by Wal-Mart, the
world's largest retailer.
"This is a long-term strategy deal that will grow strongly
over the next four to five years," President Bruce Rockowitz told
Reuters in a telephone interview after the announcement.
He added that the company was making "good money" from its
European onshore markets in 2009.
"The European business is right on track for the three-year
plan," he said.
Li & Feng said it was aiming to post annual turnover of $20
billion and a core operating profit of $1 billion under its
current three-year plan for 2008-2010. [ID:nHKG351902]
The company previously said it was relying on acquisitions
and new outsourcing deals like the one with Wal-Mart to meet its
Li & Fung posted turnover in the first half of 2009 of about
$6 billion. It has not reported its full-year results for 2009.
Wal-Mart was already among Li & Fung's clients, which include
other major retailers such as U.S. store operator Target (TGT.N)
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