Hong Kong-based global supply chain management company Li & Fung has announced a 12% increase in operating profit for the first half of the year.
The company said the business continued to progress despite “challenges in the retail industry and a volatile macroeconomic environment”.
For the six months to 30 June operating profit increased by 12% to £132.5m while turnover edged down 2.1% to £5663m.
Total margin increased from 11.4% to 11.5% for the period and measures introduced to improve efficiency and productivity resulted in a 4.5% decrease in operating costs.
Group chairman William Fung said that the company was making “substantial progress across many areas of the business”.
The company also announced that it plans to team up with knitwear manufacturer South Ocean.
Li & Fung will be combining the operations and resources of its sweater vertical with South Ocean’s business, which it says will make the brand “one of the largest and most innovative knitwear suppliers globally”.
The joint firm called JV Cobalt Fashion Holding will be owned 62% by Li & Fung and 38% by South Ocean, and will have a turnover of around £545m. The company will service brands and retailers across the US, UK, Europe, Japan and other Asian markets.
Silas Chou, president and CEO of Novel Enterprises, the parent company of South Ocean, said: “South Ocean is one of the most established knitwear companies in Asia with over 40 years of experience in supplying the world’s top brands and retailers with beautiful, functional and innovative knitwear. We see tremendous synergies in the joint venture with Li & Fung. Together, we will be driving innovation in the industry and delivering value to our customers.”