Li & Fung Ltd. had its credit rating lowered one level by Standard & Poor’s because growth at the world’s largest supplier of clothes and toys to retailers may be slower than needed to meet earnings targets.
Li & Fung Ltd., the world’s largest supplier of clothes and toys to retailers, said it will miss its 2013 profit target after net income dropped for the first time in four years as a sluggish U.S. economy damped demand.
Li & Fung Ltd. said its unit supplying Wal-Mart Stores Inc. will be profitable this year and that the retailer ended an option to buy the subsidiary because it had become “comfortable” with the relationship.
Li & Fung Ltd.’s unit supplying Wal-Mart Stores Inc. will be profitable this year after the world’s largest retailer ended an option to buy the subsidiary, which led the Hong Kong company’s shares to fall last week.
Li & Fung Ltd., the world’s biggest supplier of clothes and toys to retailers including Wal-Mart Stores Inc., rose the most in more than a year in Hong Kong trading after first-half profit beat all analysts’ estimates.
Consumers are spending in the U.S. in the holiday season, as retailers run promotions, Li & Fung Ltd.’s Chief Executive Officer Bruce Rockowitz said in an interview with Bloomberg Television’s Susan Li.
Li & Fung Ltd. , the biggest supplier to Wal-Mart Stores Inc. , said it may increase acquisitions in China as the country’s consumer spending grows, U.S. demand rebounds and inflation spurs companies to seek partners.