Apparel Sourcing Intelligence - Worldwide

Fifth and Pacific move distribution inhouse from Li & Fung

On February 8, Fifth and Pacific (F&P) announced through a US regulatory filing the end of its US warehousing and distribution agreement with Li & Fung (L&F) as from January 31. Though L&F later clarified that its contract to source for the retailer was unaffected, the announcement hit L&F shares – already weakened by earlier bad news.
Fifth and Pacific said it appointed Ridge Global, a third-party distribution centre operations nd labour management company on February 5, 2013, to provide distribution operations ervices at F&P’s West Chester, Ohio facility. The operator had agreed to employ the 150 people at the facility. What F&P called “the incremental costs of transitioning to this rrangement” were included in F&P’s recently announced financial outlook for 2013.

The Fifth and Pacific decision follows an L&F profit warning on January 11, caused by a estructuring at the LF USA distribution business Fifth and Pacific stopped dealing with on anuary 31. The warning had announced that the number of brands being distributed in the US would fall, though details about the scope of the restructuring and the brands affected are still nclear

The decision also follows announcements in September that Walmart would not exercise its ption to buy a Walmart/L&F joint venture, and earlier that Gymboree and Carter’s would move back into partial direct sourcing