For the past century, Li & Fung Ltd. has been supplying everything from shoes to baby clothes for such global retailers as Target Corp. and Wal-Mart Stores Inc. But after decades of rapid expansion, the company is logging shrinking profit margins.
Now, an even greater threat looms: retailers working directly with factories and cutting out middlemen like Li & Fung.
The company’s shares this month have posted their biggest drop since listing on the Hong Kong Stock Exchange in 1992, and several brokerage firms have downgraded the stock.
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(Source: The Wall Street Journal Online)