by winston » Thu May 14, 2009 8:04 am
Li & Fung tips opportunities in recovering US by Benjamin Scent, The Standard
Trading giant Li & Fung (0494) believes the US economy could start recovering early next year and sees many opportunities for acquisitions in the United States and Europe, president Bruce Rockowitz said yesterday.
"My gut feeling is we're close to the bottom," Rockowitz said, noting there have been "some signs of improvement" in the economy.
"Right now, some of our key customers are re-ordering pretty strongly," he said after Li & Fung's annual general meeting. Group managing director William Fung Kwok-lun said he sees a "silver lining in the clouds" as a pick-up in consumer demand has started depleting retailers' inventories.
Rockowitz said the firm's focus will be on securing major new outsourcing deals as well as "roll-up acquisitions."
"Acquisition targets are having a hard time getting financing," he said. "There are a lot of opportunities in the United States now."
Li & Fung has US$500 million (HK$3.9 billion) cash on hand, following the recent share placement, as well as US$500 million in untapped lines of financing.
Fung said: "We have enough financial firepower. It's a matter now if we have the appropriate target."
Rockowitz said the firm is also looking to expand its onshore business in handbags, accessories and brands.
He also said Li & Fung targets US$1 billion in annual revenue from its health, beauty and cosmetics business by next year and is planning acquisitions in that area.
It's all about "how much you made when you were right" & "how little you lost when you were wrong"