New York City Trading company Li & Fung Ltd. said Thursday it signed a non-exclusive sourcing deal with Wal-Mart Stores with expectations that the chain could buy $2 billion worth of goods through the Hong Kong firm in the deal's first year, according to Bloomberg. The company, which sources products for other U.S. retailers, has been doing business with Wal-Mart as a wholesaler, but this is its first direct sourcing deal.
Wal-Mart said the alliance with Li & Fung was one of several related moves designed to position the company to leverage its global scale to reduce costs of goods, accelerate speed to market, and improve the quality of products.
"We are redefining how we source products that are imported into Walmart retail markets around the globe," said Walmart vice chairman Eduardo Castro-Wright.
According to the company, its new global sourcing strategy also involves the creation of Global Merchandising Centers, and a change in leadership and structure.
"The newly established Global Merchandising Centers represent the largest and most important element of our new sourcing strategy," Castro-Wright said. "These centers will create alignment between sourcing and merchandising and drive efficiencies across various merchandise categories."
As part of the strategy, Ed Kolodzieski, currently president and CEO of Walmart Japan Holdings G.K. and Seiyu, has been promoted to executive VP and will lead Walmart’s Global Sourcing.