NEW YORK — Li & Fung Ltd. is said to be finalizing a deal to purchase Synergies Worldwide, a New York-based sourcing firm that specializes in South Asia.
It is that expertise that is said to have attracted the Hong Kong-based sourcing giant, which has its manufacturing base in China, to Synergies, according to a source with knowledge of the transaction.
“It’s likely Li & Fung’s response to developing a China Plus One strategy,” said the source, referring to companies diversifying beyond China as labor costs rise in the country and manufacturers there look to produce more for domestic consumption. “Li & Fung is looking at more low-cost, Asia-specific sourcing.”
It was unclear what role Synergies founder and president Munir Mashooqullah would have once the deal in completed. Mashooqullah, who was unavailable for comment on Thursday, started Synergies in 1987 and has focused his company’s efforts on providing fast fashion and discount apparel, accessories, footwear and home textiles to companies in the U.S. and Europe. Synergies’ sourcing is concentrated in Pakistan, India and Bangladesh, and this week the company opened an office in Sri Lanka. Synergies manages $300 million in international trade for about 75 clients around the world.
Li & Fung has a global network covering more than 40 economies in the Americas, Europe, Africa and Asia, with more than 300 offices and distribution centers. Li & Fung’s sales for the first half ended June 30 grew 3.7 percent to $9.13 billion, as net profits increased 32.6 percent to $312.3 million. The company did not respond to a request for comment on the acquisition.