Li Feng 400 million US dollars acquisition of CK and other clothing agency returns or up to 19%
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June 28, 2025
In the future, if you want to buy CK (Calvin Klein) clothing, you might have to go through Hong Kong-based Li & Fung. Through a recent acquisition, the company has taken control of the agency rights for CK and several other major apparel brands. On October 19, Li & Fung announced its largest acquisition in over a decade, acquiring most of the assets of U.S.-based Wear Me Apparel for up to $401.8 million. This move marks a significant step in expanding its presence in the American market.
Wear Me Apparel specializes in men’s and children’s fashion in the U.S., managing a wide range of franchise brands, private labels, and cartoon characters. The deal also includes the licensing of ten key brands, such as Calvin Klein, Ecko, Hurley, US Polo Association, and Disney. This acquisition not only strengthens Li & Fung’s brand portfolio but also helps it diversify its product offerings and solidify its position in the U.S. market.
Analysts from DBS Vickers have called this deal “an ideal move.†In 2008, Wear Me Apparel generated $700 million in revenue and $12 million in net profit, with no negative equity. The acquisition is expected to boost Li & Fung’s U.S. operations by around 40%, or about $700 million, according to Bank of America-Merrill Lynch.
Li & Fung has long been a major player in global supply chains, managing well-known brands like Roots, GANT, and others. The U.S. and European markets remain crucial to its business strategy. At a recent meeting, Feng Guofeng, Managing Director of Li & Fung Group, emphasized that the company will focus on expanding its operations in North America and Europe, as well as growing its supply chain business.
“We aim to increase our U.S. revenue significantly,†said Feng Guolun. “Our goal is to reach $3 billion in local U.S. sales by the end of next year.†In 2007, Li & Fung reported operating income of HK$100 billion, a slight increase from HK$92.45 billion in the previous year. Facing reduced orders due to the economic slowdown in the West, the company has been actively seeking new outsourcing deals to sustain growth.
In 2008 alone, Li & Fung made seven acquisitions, including companies like Imagine, Silvereed, and Wilson. To achieve its three-year target of $3 billion in U.S. sales, the group has launched multiple M&A strategies. For example, on February 24, it acquired the Asian sourcing business of Liz Claiborne Inc for $83 million, becoming the exclusive agent for all of the brand’s global apparel and accessories. Later, on August 13, it partnered with Talbots, a leading U.S. women’s fashion retailer, to become its exclusive sourcing agent.
BOC International estimates that this acquisition could yield a return on capital of 19%, one of the highest in recent years. Le Yumin, President of Li & Fung Group, noted that when asset prices stabilize, it’s an ideal time for strategic takeovers. “We are currently evaluating several U.S. companies with annual sales in the billions,†he said. The company now has a $1 billion acquisition pipeline and plans to finalize these deals in the coming months. These moves are not only aimed at boosting revenue but also at enhancing Li & Fung’s influence in global retail trade.