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“While our top-line growth was not as spectacular as we had hoped, it’s still in the double-digit region, and in the face of some severe price deflation, what we have done is manage our expenses very well,” he said.
Fung added that the company intended to continue to boost margins by adding services, such as design and logistics, and by increasing its sale of licensed branded products. In addition to Levi Strauss Signature tops and Levi’s Red Tab men’s tops, Li & Fung sells licensed products under the Disney and Cannon brands. The firm projected its branded products revenues would reach $1 billion by 2007.
The company noted that during the last three years it reduced its dependence on the U.S., which represented 68 percent of sales in 2004, down from 73 percent in 2002, and on soft goods, to 67 percent from 72 percent. Over that time, it grew its sales to Mexico and Canada, and also increased its offering of hard goods, such as toys and home decor items.