Supply chain solutions partner Li & Fung Limited has announced the sale of its Beauty division, alongside its Furniture and Sweaters business, to the Hony Capital and the Fung Group in what is estimated to be a $1.1 billion cash consideration.

The move comes as the company looks to further simplify the business in order to concentrate fully on its core competencies, with the Li & Fung management set to focus further on its three year plan to move towards being a digital company.

With the beauty division said to have grown over the last two years, it is thought Li & Fung established it would need significant investment to aid its expansion, which would be better placed to take place outside of the company.

Spencer Fung, Group CEO of Li & Fung, said, “The strategic divestment of the product verticals allows Li & Fung to focus on its core competencies and further strengthens our capital structure. The US$1.1 billion proceeds will allow us to pay a generous dividend to our shareholders and the remaining US$580 million of cash will give us more financial flexibility as we continue to execute our Three-Year Plan goal of building an end-to-end digital supply chain. Our 1H results were solid and our customers and vendor partners are responding very positively to our new digital solutions. We are very excited to be creating a future supply chain that does not yet exist in the market.”