LAWFUEL – Europe Law News, Law Jobs – KarstadtQuelle AG, Europe’s largest department store and mail order company, has agreed to sell its 1000-employee international sourcing business to Hong Kong-based Li & Fung, the world’s largest consumer products sourcing company. The deal involved the purchase by Li & Fung of KarstadtQuelle AG’s former sourcing organisation, KarstadtQuelle International Services AG, which has operations in 12 countries in Asia, including China, as well as in Turkey, Italy and Eastern Europe.
The parties also signed a strategic long-term sourcing contract under which it is expected that over €2bn worth of goods will be sourced by KarstadtQuelle AG directly through Li & Fung by 2008.
International law firm Freshfields Bruckhaus Deringer advised KarstadtQuelle AG on both the sale of the international sourcing business as well as negotiation of the long-term sourcing contract. The multi-jurisdictional team was led by partners Axel Epe (Düsseldorf), Connie Carnabuci (Hong Kong) and Hartmut Nitschke (Cologne) and included partners and associates from offices in Hong Kong, Shanghai, Vietnam, Düsseldorf, Cologne, Berlin, London, Milan and Vienna, from the firm’s global outsourcing, antitrust competition and trade, tax and corporate practices.
‘The strategy behind the deal for the KarstadtQuelle Group is to focus on the higher value activities of design, assortment and presentation of merchandise, while at the same time relying on a capable partner like Li & Fung to manage the sourcing pipeline. The deal will also significantly reduce working capital requirements for KarstadtQuelle AG,’ said Connie Carnabuci.