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Li & Fung’s JV with South Ocean to create a global knitwear empire

Li & Fung has entered a joint venture with a Hong Kong-based knitwear exporter South Ocean Knitters Holdings. Dubbed Cobalt Fashion Holding and worth roughly $700 million, the JV will merge the operations and resources of Li & Fung’s sweater vertical with South Ocean’s knitwear business to become one of the world’s largest knitwear suppliers.

It combines the strengths of South Ocean’s yarn development and manufacturing knowhow with Li & Fung’s product design and supply chain innovation. The total turnover of the JV is about $700 million. The JV will service brands and retailers at all price levels and in all segments, covering the US, UK, Europe, Japan and other Asian markets.

Li & Fung Group chairman William Fung says the company is excited as it does have a long history and solid track record, with a strong foundation of product innovation and expertise, given access to the world’s leading fashion brands and retailers, it has first-hand insight into how knitwear and its supply chain can be transformed to best suit today’s fast-changing apparel market.

Silas Chou, President and CEO, Novel Enterprises, the parent company of South Ocean, well known for building billion-dollar brands Tommy Hilfiger and Michael Kors, is confident that this partnership is an important milestone for the global knitwear industry. South Ocean is one of the most established knitwear companies in Asia with over 40 years of experience in supplying the world’s top brands and retailers with beautiful, functional and innovative knitwear, says Silas Chou.

Closing of the transaction, and establishment of the JV, will take place once the necessary regulatory approvals have been obtained, Li & Fung stated in a release.

 
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