|Castling Group and Li & Fung Limited To Form Internet-Based Global Sourcing Play; Castling Group and Li & Fung Trading Announce | |Online B-to-B Play in Global Sourcing. | Castling Group, an e-business accelerator that has helped build leading Internet businesses such as jcrew. com and hifi. com, and Li & Fung Ltd. , the leading global consumer products sourcing company based in Hong Kong, announced the formation of a business-to-business Internet company for leveraging Li & Fung’s core capabilities, provisionally named lifung. com. William K.
Fung, Group Managing Director of Li & Fung, stated, “This new company will leverage the sourcing power and supply chain management skills of Li & Fung Trading Group to become the ultimate resource for small retailers and wholesalers (SMEs). SMEs have many of the needs of the larger retailers, but lack the purchasing power and know-how to source differentiated products at competitive prices. ” “The Internet allows cost-effective servicing of the SME market with quality, speed and pricing levels comparable to those offered to Li & Fung Ltd. ‘s traditional larger clients,” added John Suh, Chairman of Castling Group and new CEO of lifung. om. “In addition, lifung. com will offer a host of other product offerings and a wide array of informational services. The objective is to create a complete and compelling site designed to satisfy the unique needs of this customer segment. ” “We are very excited to work with Castling Group on our Internet business, a top priority at Li & Fung, and are completely committed to the success of this venture,” pledged Victor Fung, Chairman of Li & Fung Ltd. “We are the early mover in this space, and will apply all of our resources towards the success of our . com initiative. The initial sourcing opportunity is estimated at $54 Billion in the United States alone. Li & Fung Trading Group has announced their willingness to invest $200 Million in order to hit the target of $2 Billion in online sales by 2004. The newly formed company, provisionally named lifung. com (not to be confused with Li & Fung’s corporate site, www. lifung. com), will be headquartered in San Francisco. John Suh will remain as Chairman of Castling Group but has stepped down as Castling CEO to serve as a full-time CEO of lifung. com. Other Castling managers have also assumed dedicated senior management roles at lifung. om, including Derek Chen, CTO. ABOUT CASTLING GROUP Castling Group, with offices in New York, San Francisco and Los Angeles, is one of the fastest growing e-business accelerators. It specializes in building online businesses by strategically aligning with established offline companies and entrepreneurs in the B-to-C and B-to-B e-commerce sectors. Castling offers a complete set of capabilities, including e-commerce execution expertise, interim general management, incubation facilities, and investment capital, resulting in a tightly aligned partnership to quickly and efficiently build Internet businesses.
For further information about the Castling Group, LLC (http://www. castling. com), contact Samantha Cho at (415) 402-0480 or e-mail [email protected] com. ABOUT LI FUNG TRADING Headquartered in Hong Kong, Li & Fung Limited is today one of the premier global consumer products export trading companies managing the supply chain for high-volume, time-sensitive consumer goods including garments, fashion accessories, toys and games, sporting goods, furnishings, handicrafts, shoes, travel goods and tableware.
The goods are sourced through a network of 47 offices in over 30 countries for customers in the US and Europe. For further information about Li & Fung Ltd. (http://www. lifung. com), contact Scotchbrook Communications Limited at (852) 2877-3939, or Fannie Mok at (852) 2863-9119. |STUDIO DIRECT GOES AFTER SMALL GUYS. | | There’s a new player in the Internet’s crowded B2B apparel field that is providing private label fashion for smaller retailers. So what else is new?
The surprise in the otherwise familiar wrapping is that the player, Studio Direct, is being backed by a $3 billion apparel behemoth, Li & Fung Limited — which has sunk approximately $140 million into the effort to serve stylin’ but smaller-sized companies via the Internet, marking a departure from its usual focus on large-scale chains. The business-to-business site, at studiodirect. com, is aiming at style merchants in the U. S. and Europe, with annual volumes of less than $300 million, rather than those that produce sales north of $1 billion a year, the kind that account for 90 percent of Li & Fung’s customers.
The offer from Studio Direct, set to go live online today, includes online sourcing, product development, factory management, trend tracking, and customs information. “In the past 90 days, spot prices on cashmere are up 80 percent,” noted John Suh, chief executive officer of Studio Direct, in an interview during a recent visit to the fashion district from the company’s headquarters in San Francisco. “We expect apparel firms to look to us for alternatives, in these kinds of situations. Sounding nothing like a techno-geek who most recently had formed an Internet consultancy, Suh said: “They might select a better quality merino wool as a substitute, for example, or a more affordable cashmere from a new source. ” It turns out that Suh is not the typical techno-geek: His career includes forays in supply chain management and retail, as well, including stints assisting Warner Bros. Retail develop its international marketing strategy and working with Lucasfilm to develop the Internet strategy for the release of the “Star Wars” prequel.
Suh hooked up with Li & Fung in his former role as ceo and a founder of Castling Group, an Internet consultant that counted the Hong Kong-based trading company as a client, along with JCrew. com, hifi. com, and GiftCertificates. com, among others. For year one, the startup will focus strictly on snagging the 10 percent of Li & Fung’s customers with sales of less than $300 million annually. In the U. S. , for instance, Studio Direct is estimating the market for private label fashion and lifestyle goods, of the sort it is offering, at around $50 billion.
For openers, that merchandise includes women’s apparel, men’s knit shirts, and sweaters; golfwear and accessories and home decor items. Eventually the mix will be expanded to offer woven tops and bottoms for men and women, and children’s apparel. “We’re focusing on the small-to-mid-sized companies first because they are so under-served,” Suh said. “We are trying to bring the level of service for smaller accounts up to the level of what bigger accounts are used to, like shipments that are on time and in-spec. If a shipment is late or inaccurate,” he added with a chuckle, “The Limited won’t wait.
Smaller companies aren’t used to that kind of service. ” In another departure from the typical B2B model, Studio Direct is eschewing transaction fees for its clients. “We are taking a principal stake in the product, unlike other models that require clients to play that role, but we’re not physically holding the goods,” Suh explained. “Then we take a gross margin markup and are responsible for funding the product until we sell it. Our markups are in the high teens,” he continued, “compared with wholesalers, who will give retailers 45 to 50 percent markups, and importers, who will markup anywhere from 30 to 300 percent. Studio Direct’s business model is based on giving retailers 65 percent of gross margin, an effort he expects to be aided by Li & Fung’s presence in factories where it controls anywhere from 30 percent to 70 percent of a plant’s production, as well as the technological edge afforded by sourcing online. And with a war chest of $200 million, Suh isn’t cowed by the deluge of dot-bombs or the drip drops of financing coming from venture capital faucets that once spewed forth for virtually any dot-com, let alone a formerly-favored B2B format.
Customers will be acquired off line, in large part, because, as Suh noted, “Our research showed very few people were willing to buy items online they hadn’t seen or touched, but they were willing to reorder familiar items — much like the B2C customer. ” The off-line effort began last month, with a presence at the PGA golf tournament, and is continuing this week at WWDMAGIC, which began Tuesday and concludes Friday. As part of the effort, Studio Direct will be leveraging the contacts of its advisory board, which includes Richard Marcus, chairman of GiftCertificates. om and former chief executive of Neiman Marcus; Howard Socol, chairman and ceo of Barneys New York, and former ceo of J. Crew and Burdines, and Phil Schlein, a partner with U. S. Venture Partners, and former chairman and ceo of Macy’s California. In the alphabet soup that’s become the naming pool for various Ne t ventures, Suh sees Studio Direct’s P2P — or path-to-profit in current e-speak — as a 24-to-36 month journey, beginning today. When an observer remarked that the timetable is an ambitious one, even for a less costly B2B concept, Suh responds that he’s always been big on keeping costs under control. For our first six months, we called our office space the dungeon,” Suh said with a smile in recalling Studio Direct’s first frame, back in October 1999. “It was in a damp, cold basement, but we were only paying $20 a square foot. We had people sitting next to space heaters, doing computer coding with gloves on. ” |StudioDirect Makes Private Label More Accessible and Profitable for Specialty Retailers. | Today, StudioDirect, the new private label company from Li & Fung targeting small and medium sized retailers, announced its official launch to the retail market.
StudioDirect is the first and only company to provide smaller specialty retailers with private label programs featuring the same product selection, customization options and pricing enjoyed by the largest retailers. Via the StudioDirect website at www. studiodirect. com, private label is made even easier and more accessible for every retailer. Authenticated customers can conveniently view products and pricing online as well as place orders, customize selections, track delivery status, and read up on the latest trend information.
Plus, by combining Li & Fung’s back-end sourcing network and the aggregation power of the Internet, StudioDirect can provide customers with all of the benefits of private label without the high order minimums typically associated with private label. John Suh, CEO of StudioDirect, explains “Finally, smaller retailers can take part in private label programs that will build their brand with customized product and provide attractive gross margins without the burden of matching the order quantities placed by the big guys. Sue Gorman, Vice President of Retail for Arnold Palmer Golf, also thinks the StudioDirect value proposition makes perfect sense and says, “Private label is a huge opportunity for us as a management company. When we saw the product quality, variety, styling and detail that StudioDirect offers, we knew we had a winner! ” In addition to the information provided on www. studiodirect. com, a team of StudioDirect account executives is available to help guide customers through their options and help them make the right private label choices for their businesses. About StudioDirect
StudioDirect is redefining private label to offer small and medium sized retailers private label programs featuring the great product selection, customization and pricing benefits enjoyed by the largest retailers. The company delivers a full-service solution including trend information, product development by a team of expert merchandisers, sourcing, factory management, quality control and shipping to the customer’s door. StudioDirect products include: men’s and women’s apparel, golf apparel and accessories, home decor and seasonal gift items, with new products being added on a continual basis.
As part of Li & Fung, the world’s leading private label company, StudioDirect operates with all of the advantages of a multi- billion dollar, 95-year old company, and passes these benefits on to its customers. StudioDirect is already receiving recognition for the strength of its business model, including the Year 2000 Goldman Sachs’ “Gold Medal” stamp of approval. It has also attracted a host of strategic partners including The Doneger Group, Magic Online, CIT, and Pantone(R) Color. The Company is headquartered in San Francisco with offices in New York City and is led by CEO, John Suh.
About Li & Fung Limited Li & Fung Limited is the premier global consumer products export trading company managing the supply chain for high-volume, time-sensitive consumer goods, including garments, fashion accessories, toys and games, sporting goods, furnishings, handicrafts, shoes, travel goods and tableware. These goods are sourced through a network of offices in over 30 countries for customers in the US, Europe and Asia. |STUDIODIRECT LAUNCH EXCEEDS GOALS |
Last month’s launch of StudioDirect, the new private-label extension of sourcing powerhouse Li & Fung, has left its executives pleased and anxious to expand. “The launch has absolutely exceeded our expectations,” said John Suh, chief executive officer of StudioDirect. “We are very excited about the adoption rate. And those who have placed test orders are already coming back with larger orders. ” The idea behind StudioDirect is to redefine the private label for specialty retailers, “to make it accessible and profitable for smaller retailers who want to build their brands and grow their businesses. The venture combines the sourcing power of its parent, Li & Fung, with services geared specifically toward the specialty retailer to offer an end-to-end private-label solution that works for retailers of all sizes. “What happens quite often is the smaller companies can’t create the volume purchasing power to deal with the Li & Fung’s of the industry,” said Suh. “They are forced to buy through importers in order to get the smaller quantities they need. Our objective is to provide that service for them here, using the Internet as a primary source for placing orders.
We can get them the right prices from the same supplier that the big guys go to. ” Suh said one customer aspect that did surprise them was the retailers’ acceptance of the Internet as an ordering medium. “We had just assumed the first orders would be placed offline, and, once a confidence was built in the product and service, secondary or tertiary orders would then be placed online,” he said. “But what we found were a number of customers actually placed their very first orders online, sight unseen, and they’ve come back as well.
It bodes very well for our future success. ” |Li & Fung net falls 10% on provision in U. S. | Li & Fung recorded a net profit of $HK782. 3m in 2001. The result represents a decrease of 10% for the Hong Kong-based trading company. The share price of Li & Fung decreased by 1. 4% to $HK10. 65 on 21 March 2002. Li & Fung announced a dividend of $HK0. 185 for 2001. The trading company would like to achieve revenue of $US6. 4bn by 2004. Around 74% of the revenue of the trading firm is generated by the US. A 32% increase in group revenue to $HK33bn was recorded in 2001.
A provision of $HK169m was included in the accounts for the year because of the cessation of StudioDirect. |LegalZoom. com Names John Suh Chief Executive Officer. | LegalZoom. com, the nation’s leading online legal document service, announced today that John Suh has been appointed CEO. Suh is moving into the key leadership position after serving as Chairman since 2005. “Since joining the Legal Zoom team, John has helped the company forge important strategic partnerships and played a vital role in the company’s operational and financial success,” said Brian Liu, Chairman of LegalZoom. om. “John brings more than 10 years of experience in consumer Internet experience which will be key to taking the company to new levels. ” Mr. Suh came to LegalZoom. com with extensive experience in the Internet space. Prior to joining LegalZoom. com, he served as CEO of StudioDirect, the Internet division of the $6B global supply chain leader, Li and Fung. Before that, he co-founded Castling Group, where he took a leading role in helping offline companies create their Internet divisions, launching category leaders such as jcrew. om, hifi. com, and giftcertificates. com. Suh replaces Brian Liu, co-founder of LegalZoom. com. Liu takes the appointment as Chairman, where he will focus on corporate culture, partnerships and strategic direction of the company. Suh received a B. A. in Organizational Behavior and Public Policy from Harvard College and received his MBA with high distinction at Harvard Business School, graduating as a George F. Baker Scholar. About LegalZoom. com Legal Zoom is the nation’s number one online legal document service.
Co-founded by attorney Robert Shapiro in 2001, LegalZoom. com (www. legalzoom. com) lets consumers and small-business owners take care of common legal matters online without a costly attorney. Legal document and filing services available through LegalZoom include: Wills, Living Wills, Incorporation, LLC Formation, Living Trusts, Power of Attorney, Divorce, Small Claims, Trademarks, Copyrights and more. LegalZoom. com is not a law firm and does not provide legal advice or counsel.