Li & Fung LTD.'s distribution business is beginning to weigh on its credit rating. Moody’s Investors Service cut the sourcing giant’s rating to “Baa1” from “A3.” Despite the notch down, the company’s rating is still solidly investment grade, three steps away from “junk bond” status. Lina Choi, vice president and senior credit analyst at Moody’s, pinned the company’s downgrade on “increased business risk from its distribution business, which we expect to have a slow recovery due to uncertainties in the global macroeconomic environment.” The distribution business includes LF USA, LF Europe and LF Asia and serves principally as a wholesale distributor to major retailers, providing design, products and other services. For the first half ended June 30, the division saw core operating profits fall 53 percent to $5.5 million as sales remained flat at $2.93 billion. “The distribution business, which has expanded significantly over the last three years and relies on growth of the private label and branded business, has incurred losses from one-time discontinuation of brands, sluggish consumption in the U.S., challenges associated with integrating acquired businesses and ramp-up issues,” Moody’s said. “While Li & Fung has taken significant steps to restructure its U.S. distribution platform over the course of 2013, including write-downs and a decelerated acquisition pace, Moody’s sees higher risk in this business model compared with the commission-based trading business.” Weighing in Li & Fung’s favor is a strong liquidity position. The debt watchdog noted Li & Fung ended the first half with $419 million in cash, which was more than sufficient to cover its short-term debt of $142 million.
To celebrate Pride 2018, @themarcjacobs released the #GratefulNotHateful campaign, a social media initiative aimed at extending Pride beyond the parade. Inspired by Jacobs’ everyday outlook, the campaign features Jacobs along with a group of models and social media stars who are members and supporters of the LGBT community, all seen wearing @marcbeauty’s Highliner Gel Eye Crayons in colors of the rainbow. Head to our Instagram stories to see close-ups of the liner. #wwdbeauty
Virgil Abloh’s dad Nee and Don Crawley, cofounder of RSVP Gallery, were some of the hometown crew at the Chicago-born designer’s debut show for Louis Vuitton. (📸: @jdiderich ) #wwdmens #louisvuitton #virgilabloh
About last night: @marycharteris and @adwoaaboah hit up Hyde Park for the Serpentine Galleries’ annual summer party held in partnership with @chanelofficial. Head to WWD.com to see more photos. #wwdfashion
“This is Paris, my first show. I’m all about democracy. If some kid shows up, flew from New Jersey to just be around, let’s get him a seat.” — @virgilabloh tells WWD’s @jdiderich ahead of his first show for @louisvuitton men’s. (📸: @alfredo_piola ) #wwdmens #virgilabloh #louisvuitton
“Kate Spade was a true fashion icon who brought joy to the lives of women around the world, and inspired women to live life to the fullest. We are dedicated to carrying on her legacy,” said Anna Bakst, brand president and chief executive officer of @katespadeny. The Kate Spade Foundation announced that it will be donating $1 million to suicide prevention and mental health awareness in tribute to the recent death of Kate Spade. Read more on WWD.com. #wwdnews (📷: @chinseephoto)
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The world’s largest producer of denim @iskodenim is sharing the strategy behind its product development process. Read our full interview with ISKO’s product development manager Baris Ozden on the company’s extensive research practices, upcoming denim trends and the latest material innovations on WWD.com. #iskodenim