Multi-national sourcing and distribution group Li & Fung has taken the next step in its plans to split off its brands and licensing business, submitting an application to The Stock Exchange of Hong Kong for the new Global Brands Group and announcing the leadership of the two separate entities.
The intention to spin-off and list Global Brands Group as a separate entity was announced in March as part of the company’s three-year plan.
Given the separate needs and different business models of Li & Fung and Global Brands Group, creating two companies will enable each company to pursue their own specific and focused strategy. Li & Fung will be able to concentrate on its sourcing and logistics offerings, while Global Brands Group develops its design capabilities as well as its brand development, licensing and marketing businesses.
“Our decision to spin-off and list Global Brands Group as a separate publicly-listed entity on the Hong Kong Stock Exchange is a natural extension of this strategic realignment of our business,” says William Fung, chairman, Li & Fung Limited. “We view this as a separation of equals with each company having strong growth prospects, and we believe that separating Li & Fung and Global Brands Group into two distinct companies will deliver meaningful benefits to each of the businesses, our customers, and our shareholders.”
For Global Brands Group, Bruce Rockowitz will assume the role of chief executive officer and a management team has now been put in place: Dow Famulak will become president and manage business operations; Ron Ventricelli will be the chief operating officer; Jason Rabin will become the chief merchandising manager; and Frank Leong will join as chief financial officer. William Fung will become the non-executive chairman.
At Li & Fung, as previously announced, William Fung will remain chairman and Spencer Fung, currently chief operating officer, will assume the role of chief executive officer. There are currently no other changes in the Li & Fung management team.
“In 2005, we began the brands and licensing business to capitalize on Li & Fung’s expertise, global network and history in the apparel industry. It has since grown into a very sizable and renowned business that manages a portfolio of some of the strongest global brands that exist today,” says Bruce Rockowitz, group president and chief executive officer, Li & Fung Limited. “All of us at Li & Fung see great opportunity to develop this business further through a growth strategy that will include further building out the portfolio of licensed brands, adding new categories to the current brand portfolio, and increasing the geographic and channel footprint.”
The Stock Exchange of Hong Kong has accepted Li & Fung’s listing application for Global Brands Group, which is being reviewed. If accepted, each Li & Fung shareholder will receive one Global Brands Group share for every share it owns in Li & Fung.