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NEW YORK — Li & Fung Ltd. is in talks to acquire Ralsey Group Ltd., a sportswear and knitwear firm with sales of $100 million, according to people familiar with the situation.

Ralsey’s business is mostly in the private label area, but the firm has developed some brands, including Rocket898, with knitwear and sportswear for juniors’; R898, a better junior and contemporary collection, and Rocket Girl for girls.

The firm is expanding its Ralsey line of better knitwear and wovens for spring. The lifestyle collection, targeted at department stores and national chains, has an updated look with plenty of fashion details, such as brooches and asymmetrical necklines.

“We’re looking at a number of companies — nothing, though, frankly at this stage, has been finalized,” said Rick Darling, president of Li & Fung USA Ltd. “We are obviously pretty continually looking in the market for good companies.”

A Ralsey spokeswoman declined to comment.

The 17-year-old company is owned by Michael and Jamie Delaney and has offices here and in Hong Kong. Li & Fung might use the firm to bolster its design and merchandising capabilities.

The Hong Kong-based Li & Fung this year began producing Levi Strauss Signature tops and men’s Levi’s Red Tab tops under license from Levi Strauss & Co. Li & Fung posted revenues last year of 42.63 billion Hong Kong dollars, or $5.47 billion at average exchange.

— Evan Clark

This story first appeared in the October 22, 2004 issue of WWD. Subscribe Today.