By Robyn Meredith and Frank Longid - Sep 1, 2011
Christmas sales may match last year’s as retailers withstand “uneven” growth in the U.S. and Europe, said billionaire Victor Fung, chairman of the world’s biggest supplier of consumer goods.
“Perhaps the recovery rate is a little slower than what one had hoped for,” the chairman of the Li & Fung Group, whose listed unit supplies Wal-Mart Stores Inc. (WMT) and Macy’s Inc. (M), said in a Bloomberg interview. “The key thing is it is recovering.”
Li & Fung Ltd., which gets most of its sales in the U.S., rose as much as 6.8 percent in Hong Kong trading today and was the second-biggest gainer on the benchmark Hang Seng Index. U.S. stocks gained yesterday as the government reported growth in factory orders that exceeded projections, while a private report showed American business activity topped forecasts.
“We still see overall retailing to be actually still recovering,” Fung, whose business group includes convenience stores, a toy retailer and a luxury clothing chain, said in the interview on Aug. 30. “Volumes in money terms will be quite steady.”
Retailers on average will probably see same-store or comparable sales growth this year, said the billionaire. They are “accepting price increases and at the same time passing on some of that, very carefully, to customers,” Fung said.
Commodities Costs
Li & Fung Ltd. (494), which also supplies Inditex SA (ITX)’s Zara and Marks & Spencer Group Plc (MKS), traded at HK$14.90, up by 6.1 percent, as of the 12 p.m. trading break in Hong Kong. The stock has gained 24 percent in Hong Kong trading since Aug. 11, when it posted first-half profit that beat all analysts’ estimates.
The Hong Kong-listed company supplies clients with 240 offices in 40 countries coordinating a network of 12,000 factories -- none of which it owns. About half of Li & Fung’s sourcing is still done in China while production in countries like Bangladesh, Indonesia and Turkey grows.
Toymakers at the China Import and Export Fair held earlier this year charged more to fill orders for Christmas, citing higher labor and materials costs as well as the yuan’s appreciation against the dollar. The event, which happens twice a year, is also referred to as the Canton trade fair.
Further price increases will be tempered as declining commodities costs offset rising wages, Fung said.
Toys, Luxury Clothes
Cotton futures have plunged 27 percent this year, making it cheaper for the factories contracted by companies like Fung’s to make clothes. Cotton for December delivery fell 0.4 percent to $1.0535 a pound on ICE Futures U.S.in New York as of 11:22 a.m. Hong Kong time.
Crude oil, the source for chemicals used in toymaking, has declined 2.5 percent this year on the New York Mercantile Exchange after gaining 15 percent last year, according to data compiled by Bloomberg.
Li & Fung Group includes retailers such as Trinity Ltd. (891), a retailer of luxury clothing and shoes in China, South Korea and Southeast Asia. Trinity rose 0.5 percent to HK$8.14 and has slipped 0.6 percent this year, compared with a 9.2 percent drop in the Hang Seng Index.
Global demand may also be supported by Japan’s recovery, Fung said. “I still feel that the Japanese economy will be a growth driver for the world.”
Fung last month founded the Fung Global Institute, a think tank with Nobel laureate Michael Spence overseeing its research agenda.
He and his brother William Fung rank fifth on Forbes’ Hong Kong rich list, with an estimated combined wealth of $8.6 billion.
Among their group’s companies are Convenience Retail Asia Ltd., which operates 500 Circle K and Saint Honore stores in Hong Kong, Macau and southern China. Li & Fung Group’s Toys (Labuan) Holding Ltd. operates Toys “R” Us in the greater China region and Southeast Asia.
To contact the reporter on this story: Robyn Meredith in Hong Kong at rmeredith8@bloomberg.net |
发表于 2011-9-1 03:20
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