Li & Fung to partner with Wal-Mart

Fifteen years ago trading group Li & Fung made $1.2 billion in revenue. In 2008 it posted sales of $14 billion, and this year it aims to rake in $20 billion.

It's likely to happen--especially because the global sourcing giant run by billionaire brothers Victor and William Fung leapt closer to that goal when it announced a partnership with Wal-Mart Stores Inc.

The Hong Kong-based company funnels clothes, toys and sporting goods to brand-name retailers including Kohl's, Target, Marks and Spencer and Talbots.

Originally a company that connected buyers and sellers, in recent years Li & Fung has expanded to control more and more of the supply chain, from logistics to production to product design.

Last year it took over Liz Claiborne's sourcing arm; in October it bought U.S.-based Wear Me Apparel's clothing and accessories operations, whose products are sold at retailers like Macy's.

Under the new agreement, Li & Fung will form a new subsidiary company called WSG to act as a buying agent--though not an exclusive one--for Walmart, selling up to $2 billion worth of goods during the first year of the partnership.