Li & Fung Ltd., the publicly held global consumer goods exporter and sourcing giant based here, has made its first forays into the health, beauty and cosmetics sector, and is looking at the category as its next growth platform.
HONG KONG — Li & Fung Ltd., the publicly held global consumer goods exporter and sourcing giant based here, has made its first forays into the health, beauty and cosmetics sector, and is looking at the category as its next growth platform.
The company recently acquired CGroup and PB Beauty, securing two established companies to build a foundation in the sector. CGroup, one of the leading health, beauty and cosmetics supply chain companies, was established in Hong Kong 20 years ago by French brothers Yan and Guy d'Auriol. Li & Fung purchased shares of the family-run company in June for about $120 million, with up to an additional $80 million payable to the family if certain profit targets are met.
The second acquisition came in August, when Li & Fung paid about $96 million to acquire Peter Black International Ltd., the U.K.-based supplier of footwear, accessories and personal care merchandise for leading European retailers such as Marks & Spencer, Tesco, Sainsbury's and Boots. PB Beauty, a division of the company, is a significant player in the HBC industry.
Bruce Rockowitz, president of Li & Fung Trading Ltd., said the entry into the HBC business is logical and timely.
"Our objective is to create a one-stop shopping service for retailers," Rockowitz said. "For over 100 years, Li & Fung has been in the apparel business. For the last 10 years, we have been a hard goods exporter, with home accessories, furniture and toys comprising one-third of our business. We look at HBC as the third leg of our business. In fact, like our soft goods and hard goods businesses, it has similar infrastructure, problems and opportunities. It is a sector with enormous potential and we believe it will be one of the major growth drivers of our business in the future."
CGroup was an attractive prospect for many reasons, Rockowitz said.
"Not many companies out here in Asia have the experience and expertise in supply chain management in the HBC sector," he said. "CGroup is a relatively small but solid company with a very good management team already in place, not to mention an existing customer base we will be able to tap into."
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