Hong Kong apparel sourcing giant Li &
Fung Limited has acquired U.S. shoemaker Jimlar for an undisclosed sum. Founded in 1956, Jimlar currently
owns the iconic Frye boots brand and is also a licensee for Coach and
Calvin Klein. Li & Fung said the Jimlar acquisition will add around
$540 million of revenue in 2010.

“The acquisition is a significant step
in expanding the group's onshore presence in the US as well as its
capabilities in the footwear business,” said Li & Fung in a written
statement.

Jimlar also owns the Mountrex outdoor footwear brand and the RJ Colt men's
casual and rugged footwear line.

Li & Fung announced the acquisition while releasing strong first-quarter results. It also said it acquired an Asian logistics company Integrated Distribution Services Group Ltd. in a deal valued at HK$7.0 billion (US$897 million), and also acquired China furniture exporter Kenas.


The trading firm, which sources products for clients such as
Wal-Mart Stores Inc. and Abercrombie & Fitch Co., has said it has US$1 billion in cash for future
acquisitions. It has so far this year announced the acquisition of seven
companies and signed four licensing deals on top of a sourcing agreement
with Wal-Mart Stores Inc. in January under which the U.S. retailer
could buy US$2 billion worth of goods through Li & Fung in the first
year of the deal.

Li & Fung saw record core operating profit growth of 55% for the first six months of 2010, reflecting the effects of nascent economic recovery in the United States together with contributions from previous acquisitions and outsourcing deals.

For the first six months ending 30 June 2010, the Group's turnover was HK$51,792 million (US$6,640 million), 12% higher than same period in 2009. Core operating profit increased to HK$2,635 million on the back of continued growth in the higher-margin onshore businesses of the United States and Europe, disciplined cost control and the provision of more value-added services. These factors helped the Group continue to deliver solid operating leverage as well as strong profit growth.
Profit attributable to shareholders reached HK$2,171 million, an increase of 55% compared to first six months of 2009. Basic earnings per share were 57.5 HK cents, an increase of 50% compared to 38.3 HK cents during the same period in 2009.
Mr. William K Fung, Group Managing Director of Li & Fung Limited, said, “We are very pleased to report record high core operating profits for our first-half results, which is testimony to how Li & Fung has been able to weather the financial crisis and emerge in a stabilizing market even stronger. We were also delighted to see improved momentum from our existing customers as we entered 2010, which has resulted in solid organic growth. Going forward, we are confident that we can continue growing our business both organically and through acquisitions before unveiling our next Three-Year Plan in early 2011.”
 
Mr. Bruce Rockowitz, President of Li & Fung (Trading) Limited, said, “So far 2010 has been very eventful for us. We entered into a landmark sourcing arrangement with Wal-Mart Stores, Inc. early in the year. Subsequently, we made several strategic acquisitions to expand our beauty, U.S. and European onshore businesses, including Visage Group Limited, Jackel Group, and the new addition of Jimlar Corporation that was announced today. Together, these deals represent significant inroads into the key areas of growth that we have laid out over the past few years. With a war chest of over US$1 billion, the pipeline of deals will remain strong.”
 


FINANCIAL HIGHLIGHTS


(HK$ million)


2010


2009


Change


Turnover


51,792


46,292


+12%


Core Operating Profit


2,635


1,697


+55%


As % of Turnover


5.09%


3.67%


Profit attributable to

shareholders of the Company


2,171


1,397


+55%


Earnings per Share – Basic


57.5 HK cents


38.3 HK cents


+50%


Dividend per Share


38 HK cents


26 HK cents


+46%