HK's Li & Fung 2016 profit down 47 pct, lags forecasts

HONG KONG, March 29 (Reuters) - Global exporter Li & Fung

Ltd said on Wednesday its 2016 profit tumbled 47

percent, missing expectations, as a tough economic environment

forced retailers to reduce inventories and online rivals

threatened the firm's business model.

Li & Fung, which grew to prominence by making clothing and

toys for Western retailers, said its net profit for 2016 fell to

$223 million, from $421 million a year earlier.

Analysts were expecting a profit of $246 million, according

to Thomson Reuters SmartEstimate data.

Excluding M&A items, adjusted net profit fell 24.4 percent

to $261 million, the company said, while core operating profit

dropped 19.6 percent to $412 million.

Entering into a new Three-Year Plan, Li & Fung said an

immediate first step was to reorganize the company into two

segments, focusing on services and products.

The firm added that it will continue to invest in

infrastructure and facilities this year to enhance speed,

innovation and digitalization of the supply chain.

Shares of Li & Fung closed down 0.5 percent ahead of the

earnings announcement, lagging a 0.2 percent rise in the

benchmark Hang Seng Index.

(Reporting by Donny Kwok; Editing by Randy Fabi)