A booth at the Hong Kong Toys & Games Fair in January. Toymakers this year charged more to fill orders for Christmas, citing higher labor and materials costs as well as the yuan's appreciation against the dollar. [Photo / Agencies]

HONG KONG - Victor Fung, billionaire chairman of the Li & Fung Group, which includes the world's biggest supplier to retailers, said Christmas season sales will match last year's as the global economy recovers.

"We still see overall retailing to be actually still recovering," Fung, whose group's Li & Fung Ltd supplies Wal-Mart Stores Inc and Macy's Inc, said in an interview. "Volumes in money terms will be quite steady."

Li & Fung, which gets most of its sales in the United States, has gained 24 percent in Hong Kong trading since Aug 11, when it posted first-half profit that beat all analysts' estimates. US stocks gained on Wednesday after the government reported growth in factory orders that exceeded projections, while a private report showed US business activity topped forecasts.

"Perhaps the recovery rate is a little slower than what one had hoped for," Fung said on Tuesday. "The key thing is it is recovering."

Retailers on average will probably see same-store or comparable sales growth this year, said the billionaire. The business group Fung leads includes Trinity Ltd, a retailer of luxury clothes and shoes in China, South Korea and Southeast Asia.

Price increases

Retailers are now "accepting price increases and at the same time passing on some of that, very carefully, to customers", Fung said.

Toymakers at the China Import and Export Fair held earlier this year charged more to fill orders for Christmas, citing higher labor and materials costs as well as the yuan's appreciation against the dollar. The event, which happens twice a year, is also referred to as the Canton Trade Fair.

Further price increases will be tempered as declining commodities costs offset rising wages, Fung said.

Li & Fung, which also supplies Inditex SA's Zara and Marks & Spencer Group PLC, climbed as much as 6.7 percent, the biggest intraday gain in two weeks, to HK$14.98 ($1.92) in Hong Kong trading. The stock traded at HK$14.84 as of 9:57 am local time and was the biggest gainer on the benchmark Hang Seng Index, which advanced 1.9 percent.

Personal wealth

Trinity rose 0.5 percent to HK$8.14 and has slipped 0.6 percent this year, compared with a 9.2 percent drop in the Hang Seng Index.

Global demand may also be supported by Japan's recovery, Fung said. "I still feel that the Japanese economy will be a growth driver for the world."

Last month, Fung founded the Fung Global Institute, a think tank with Nobel laureate Michael Spence overseeing its research agenda.

He and his brother William Fung rank fifth on Forbes' Hong Kong rich list, with an estimated combined wealth of $8.6 billion.

Among their group's companies are Convenience Retail Asia Ltd, which operates 500 Circle K and Saint Honore stores in Hong Kong, Macau and southern China. Li & Fung Group's Toys (Labuan) Holding Ltd operates Toys "R" Us stores in the greater China region and Southeast Asia.

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