More details emerge on Wal-Mart, Li & Fung deal

-- Home Textiles Today, 1/28/2010 9:25:00 AM

Hong Kong – Li & Fung’s new business handling direct sourcing for Wal-Mart, announced earlier today, will be called WSG. The wholly owned subsidiary is expected initially to be focused 80% on hard lines, the company’s president told HTT.

Wal-Mart’s new Global Sourcing Centers will focus on the multi-national retailer’s global private label brands, while WSG and Wal-Mart’s other vendors will supply the rest, said Bruce Rockowitz, president Li & Fung Trading Ltd.

“Wal-Mart is so large, and it’s hard for one entity to do everything,” he said.

WSG will handle sourcing for all of Wal-Mart’s retail businesses in the United States, Canada, Mexico, Puerto Rico, Central America, Brazil, Chile, Argentina, United Kingdom, India, Japan and China, including Sam’s Club.

WSG will be headquartered in Hong Kong. Li & Fung veteran Dow Famulak, who relocated to London two years ago to build the global trading house’s business in Europe, will move back to Hong Kong to head up WSG. He will report to Rockowitz.

The new business will be staffed by some current employees of Li & Fung as well as some of Wal-Mart’s global sourcing employees, although there could be additional outside hires as the business develops satellite offices in other countries.

“Factories that do business with Wal-Mart today will continue to do business with them. In some cases, we already share the same factories,” said Rockowitz.

The project developed with Wal-Mart over time as the two companies “got to know each other” through Li & Fung USA, he said. “We just signed this agreement today, so it really is a work in progress,” he added. “Starting Monday, we’ll have many, many meetings.”

Li & Fung works with 15,000 vendors from more than 40 countries and operates 80 offices. The company recently opened a hub office in Istanbul, Turkey to serve Europe, the Mediterranean, Middle East, Northern Africa and the former Soviet Union republics.