(Reuters) - Wal-Mart Stores Inc , the world's largest retailer, said it has decided to take in-house some product sourcing business that had been handled by Direct Sourcing Group (DSG), a unit of Hong Kong's Li & Fung Ltd <0494.HK>.
"We have made a business decision to transfer certain sourcing functions for Wal-Mart in-house and as such will work collaboratively with DSG to ensure a smooth transition over the next several months," Wal-Mart said in a statement.
Wal-Mart said that it would continue to use DSG for sourcing products for Sam's Club, a unit that sells products in bulk and competes with Costco Wholesale Corp
Wal-Mart operates 648 Sam's Club stores, or about 12 percent of its network of 5,200 stores in the United States, its largest market. Globally the retailer runs about 11,500 stores.
Wal-Mart had announced its partnership with Li & Fung in 2010. It said at the time that Li & Fung would form a new company to manage the account, expecting it to act as a buying agent for $2 billion worth of goods in the first year.
Wal-Mart did not immediately respond to additional questions about its relationship with Li & Fung. News of Wal-Mart's move was first reported by the Wall Street Journal.
(Reporting by Nathan Layne in Chicago; Editing by Lisa Shumaker)
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