Blog: 'One size' sourcing model doesn't fit
Leonie Barrie | 2 March 2009
Liz Claiborne’s global sourcing operations were once seen as a key to its competitive strength. But now, in an about turn that is partly driven by the end of quotas, a refocus of its business onto a few major labels, and the slowdown in consumer spending, it is handing its sourcing business to Hong Kong-based Li & Fung.
The deal covers the Lucky Brand, Juicy Couture, Kate Spade, and Isaac Mizrahi designed Liz Claiborne New York lines, and adds to an existing sourcing agreement for Mexx.
"Our 'one size fits all' sourcing model does not align well with our brand-centric strategy," said William McComb, CEO of Liz Claiborne. Indeed, tapping into Li & Fung's global sourcing network will not only give the company more flexibility, but will also tackle the specific needs of each brand.
Production changes are also underway in Australia, where clothing giant Pacific Brands is axing 1,850 jobs, eliminating some of its labels, and closing its manufacturing facilities as part of a restructuring aimed at cutting annual costs by AUD150m by 2011. The company, which owns brands such as Bonds, Holeproof, Kayser, KingGee and Yakka, intends to focus on its best-selling brands and will shutter most of its Australian factories as well as exit its manufacturing operations in Asia.
Store closures are being planned by retailer Gap Inc, which is shuttering about 100 shops in 2009 after posting a 7.9% drop in fourth quarter profit to US$243m. The company was hit by falls in same-store sales in all its North American retail divisions, including Gap, Banana Republic and Old Navy, as well as in its international businesses.
Cost cuts and efficiencies are behind a decision by UK retail mogul Sir Philip Green to merge his Bhs department store chain with the Arcadia Group portfolio of brands that includes Topshop, Burton and Dorothy Perkins. Functions like logistics, property and finance will be consolidated, and the introduction of some of the group’s fashion brands into Bhs stores is also being mulled.
The British government, meanwhile, is focusing on ways to make clothing more sustainable and less environmentally damaging, with its Sustainable Clothing Action Plan (SCAP) launched to coincide with the start of London Fashion Week. It has enrolled the support of over 300 organisations, from high street retailers, to designers and textile manufacturers who have pledged to improve the sustainability of clothing and battle the environmental impacts of 'throw away fashion'.
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