Hong Kong—Li & Fung Ltd., the sourcing giant for many U.S. retailers, said last week that it plans to spin off its brand and licensing division into a separate company that will be called Global Brands Group.
CEO Bruce Rockowitz will head Global and Spencer Fung, Li & Fung’s chief operations officer, will become the new chief executive at Li & Fung.
While the deal still need to be approved by the Hong Kong Stock Exchange, the spin off will each each company to focus “on its roots and what it does right,” Rockowitz said.
Li & Fung has expanded quickly over the last few year with acquisitions, but has discontinued brands, cut costs etc. to help turnaround its U.S. business which includes the brand and licensing operations that are being spun off.
“We’ve gone through a difficult time, but it’s on its way up,” Rockowitz said of the branding business. “It’s more volatile, but it’s a high-margin business.”
News of the spin off came as Li & Fung reported its 2013 net rose 17% to $725.3 million. thanks largely to the turnaround in its U.S. business. Revenue was up 2.6% to $20.75 billion.