Betting the trend toward outsourcing production will continue, former Liz Claiborne executive Fritz Winans is heading to sourcing specialist Loyaltex Apparel USA Inc., where he next week will assume the post of president.
Winans, 48, will oversee the firm’s day-to-day operations, customer relations and strategic direction, as well as coordinate with Bob Shamis, chairman and co-founder of the company.
“People are starting to realize — retailers and wholesalers — that they may be better served by outsourcing their sourcing,” said Shamis, who sees value in a focused business model despite all the attention garnered by brands and stores
“Why don’t I go vertical and buy a retailer when there are so many for sale?” said Shamis. “We’re not retailers.”
That straightforward approach and focus has helped Loyaltex, which has a total of 330 employees between its offices in Hong Kong and New York, grow over the last 15 years to annual revenues of more than $300 million. Its list of clients include Aéropostale and Mothers Work.
Loyaltex works with a network of 70 product facilities in countries such as China, Indonesia and Bangladesh.
Loosening trade restrictions, a switch to lower-cost countries and increased sourcing sophistication have kept apparel prices down over the last decade. However, increased labor, raw material and transportation costs have made sourcing more expensive lately. Brands and retailers are increasingly turning to sourcing firms, such as the market leader Li & Fung, as well as Loyaltex, to get their goods made.
The behind-the-scenes work of fashion is familiar territory for Winans, who left Claiborne in May after 12 years with the firm. He was most recently senior vice president of global sourcing and manufacturing. Prior to that, he had been group president of the firm’s better- and moderate-priced brands.
“Inflation and where the economy is today are certainly having people second guess their operations and their cost of doing business,” said Winans. “Sometimes it’s easier to let people do what their core competency is. Retailers are really marketers and brand managers of product, but they don’t necessarily know how to get it built.”