Li & Fung Limited reported revenues for the year ended December 31 came in at HK$104.5 billion ($13.4 bn), down 6% from revenue of KH$110.7 million ($14.2 mm) in the year-ago period. Management at the Hong Kong-based group said the dip in sales reflected sluggish markets, weak consumer sentiment and certain customer insolvencies related to KB Toys, Archandor, Deutsche Woolworth and others. Despite laggings sales, Li & Fung reported record profit for the year as cost cutting and strong results from its higher-margin  onshore business – in particular Van Zeeland, – propelled operating profit 29% to HK$3.99 billion ($511.1 mm). According to management, cost savings for 2009 amounted to 14.4% of total revenues excluding acquisitions and outsourcing deals.


Profit attributable to shareholders was HK$3.37 billion ($47.6 mm), an increase of 39% from 2008. Basic earnings per share were 91.0 HK cents (11.7 cents USD), up from 69 HK cents (9 cents USD) last year.

By market segment, Li & Fung noted that the U.S. market had increased to 64% of sales from 62% of sales in the prior year, yielding a 2% decline in sales as a percentage of revenues from the Europe segment.


Sales to Australasia, Canada, Central & Latin America and Japan and the rest of the world were essentially unchanged. By product segment, the companys hardgoods was up four percentage point to 70% of total sales, yielding a four percentage point decline to 30% for softgoods sales.


The Board of Directors has proposed a final dividend of 49 HK cents (6.3 cents USD) per share.


Regarding outlook, Bruce Rockowitz, president of Li & Fung, said 2010 was the last year of the companys three-year plan. While our turnover (revenue) target of US$20 billion and core operating profit target of US$1 billion seem challenging at present, we remain committed to them,” he said.