For those who had not noticed... Li & Fung, the largest sourcing agent on the planet, said the insolvency of German retailer Arcandor, one of its biggest customers (6% of sales), would affect the company's ability to hit its three-year target of US$20 billion (HK$156 billion) in annual revenue.
I don't care what anyone tells me, but this is good for US retailers. Increased capacity in Asia plus added government incentives for local factories to be net exporters of apparel and footwear while the major agents are aggressively courting more US business??? Can someone tell me why that's NOT fundamentally bullish? I've been riding the theme of an incremental shift in the balance of power from Asia to the US, and this is another major datapoint.
According to a recent press interview from New York with William Fung...
"I think we have to work hard to sign more deals. We have been successful with the Liz Claiborne deal and we have a couple of other deals we are working on, in fact that is why I'm here".
In February, Li & Fung agreed to pay $83 million to become Liz Claiborne's primary sourcing agent for apparel and accessories. Late in April, the company said it expected to sign an outsourcing deal with loss-making U.S. retailer Talbots Inc within the next 45 days.
"We are hopeful we can make up for some of these unfortunate losses in our turnover," he said.
Fung, said he was working on a potential deal with an American company, and said the company would work to fulfill its three-year plan through acquisitions and outsourcing deals in the U.S. and Europe.