HONG KONG — Li & Fung has agreed to a new strategic partnership with PVH Corp. in what the sourcing company hopes will create the “supply chain of the future.”
Although the details of the agreement were vague, the two parties said on Friday that Li & Fung will provide “additional value-added services to PVH” focused on “applying the latest technology and know-how into the PVH supply chain.”
“We’ve had a long-standing relationship with PVH and we’re excited to continue building on that under this new strategic partnership where we’ll have an opportunity to create what we see as the supply chain of the future,” Spencer Fung, chief executive officer of Li & Fung, said in a statement.
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The agreement will replace an existing non-exclusive buying agency agreement between them which is expected to end on July 1. Among the new stipulations, PVH will be obligated to source certain Calvin Klein Jeans products and at least 54 percent of certain Tommy Hilfiger products through Li & Fung.
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“Our focus is to create a more effective and efficient supply chain that will enable us to adapt and evolve so we can stay ahead in our rapidly changing industry,” said Daniel Grieder, ceo of Tommy Hilfiger Global and PVH Europe. “This transformation in our sourcing strategy is an important step in our initiative to improve speed to market and for the faster integration of consumer insights into our new collections.”
The PVH-owned Tommy Hilfiger has been one of the most prominent brands to adopt the in-season approach, and presented its second see-now-buy-now show last month in Venice Beach, Calif.
While fashion brands are evolving toward a more straight-to-retail model enabled by improvements in the supply chain, Fung Global Retail & Tech, the think-tank arm of Li & Fung, also cautioned in a February report that the strategy may not suit everyone.
“See-now-buy-now will likely not be a good model for very high-end, very intricate designer collections that rely on time-consuming and meticulous craftsmanship,” it said. “For others, where the production time could be shortened, the model looks more adaptable to see-now-buy-now. There is room for both models, and different brands and designers will have varying strategies.”
Li & Fung is announcing its 2016 results as well as revealing its three-year strategy on March 29.