Hong Kong-based global consumer goods exporter Li & Fung Limited announced that it has entered into an asset purchase agreement to acquire the handbag business of Rosetti Handbags and Accessories Ltd ("Rosetti"), which is based in New York (NY), USA.
The total cash consideration for the purchase is approximately US$162 million and will be financed by Li & Fung's internal cash reserves and bank borrowings. Completion of the acquisition is expected to take place on or before July 31, 2006.
For the fiscal year ended December 31, 2005, the Rosetti handbag business reported a turnover of approximately US$195 million and a profit before tax of approximately US$28.6 million.
The acquisition is part of Li & Fung's strategy to continue building a strong United States wholesale business in the private label area and to expand Li & Fung's non-apparel business.
Mr William Fung, Group Managing Director of Li & Fung Limited, said, “This acquisition will help the Group create additional points of entry into our current customer base and also department stores. It will also strengthen Li & Fung's positioning as a cohesive, one-stop solution for retailers across a number of product categories."
Mr Bruce Rockowitz, President of Li & Fung (Trading) Limited, said, “Li & Fung has already developed a sizeable business in the United States through acquisitions and organic growth, especially in the department store and mass market segments. The addition of the Rosetti handbag business will provide the Group with new capabilities in the design, marketing and sale of women's handbags, purses and related accessories."
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