Li Feng Business Focus On Helping Mainland Develop Its Own Brand

Li Fung moved to China to help mainland retailers expand its brand.

On June 23rd, according to the daily mail, the Foreign News quoted sources as saying that Li Feng plans to establish a joint venture with Shanghai Bailian and Beijing Wangfujing to help retailers develop their own homes.

And home furnishings brand, Li Feng will assist in purchasing, brand authorization and management, and sign a cooperation agreement in Shanghai today.

It is understood that Li Feng today announced the way of cooperation and details of the joint venture company.

WAL-MART hard to make up

Peng Bo reported that Li Feng plans to form an alliance with two Chinese department stores to establish a joint venture to help retailers develop their own clothing and household goods brands, including clothing for men and women, children.

And household products.

According to the report, Li Feng has 60% turnover from the United States, some from WAL-MART orders, and a joint venture with department stores in the mainland. It can bring foreign retail experience to Chinese retail enterprises to help China expand its own brand.

Reported that the paction may help Li Feng compensate for the loss of WAL-MART's recent orders, analysts believe that due to the details of the establishment of the joint venture and the amount of money has not yet been disclosed, it is difficult to assess how much contribution can be made to Li Feng, but WAL-MART has always been a major customer of Li Feng, believing that the new joint venture is difficult to offset the loss of WAL-MART's orders.

A group of Wangfujing

This cooperation is clearly the move of Li Feng to shift the focus of the market to China. The analyst points out that Li Feng has established joint ventures with international brands or retailers to assist them in purchasing and developing.

I believe that the proportion of Chinese customers to the total customers will increase in the future.

According to the data, there are 29 department stores in the mainland, which began to pform last year, no longer open shop in traditional department store business, instead of shopping centers. There are shopping centers, shopping plaza and shopping centers in Bailian, Shanghai. According to the company web page, the annual turnover is 50 billion Yuan RMB, and there are more than 5000 shops in the mainland.

Li Feng shares rose 1.8% yesterday, closing at 6.68 yuan.

UBS sees profit outlook

In recent years, the rise of the electricity supplier has changed the global supply chain management mode of multinational brands. Retailers and brands are directly sourcing from manufacturers, and the role of "intermediaries" has been marginalized.

In the past two or three years, the market has often spread the news of reducing orders by the clients of Li and Feng. It also refers to the decline of the "intermediary" and the narrowing of the profit margin.

According to the UBS report, WAL-MART and Kate Spade will cut orders for Li Feng customers, or more retailers will reconsider their cooperation with Li Feng, consider purchasing their own to save costs, and the profitability of Li and Feng will fall.

Feng Yujun, chief executive of Li Feng, once explained that some retailers are making more and more direct purchases. Some retailers still make purchases through Li Feng, and the core customer orders of the company still grow.