Supply chain manager Li & Fung Limited, whose global distribution and trading centres make it a useful barometer of consumer sentiment, reported its half-year core operating profit slipped by more than a fifth due to a slower-than-expected turnaround of its LF USA unit and weak demand in Europe.
The Hong Kong-based group, which manages supply chains for major retailers such as Wal-Mart Stores and Target, said, however, that net profit rose by a third as it booked write-backs on two 2010 acquisitions.
Analysts had predicted that US retailers would be actively re-stocking as consumer confidence improves, boosting top-line growth at Li & Fung this year, but latest data showed spending by consumers fell in June for the first time in nearly a year.
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