The Business of Fashion
Agenda-setting intelligence, analysis and advice for the global fashion community.
Agenda-setting intelligence, analysis and advice for the global fashion community.
Though pandemic-induced factory closures and port bottlenecks might be increasingly a distant memory for most fashion companies, it doesn’t necessarily mean supply chains have become more resilient to shocks.
Last week, when Dr. Martens issued its second profit warning in two months, the British boot brand cited “people and process issues” impacting its supply chain, requiring it to lower expected full-year EBITDA to between £250 million and £260 million ($309 million and $321 million), around £16 million to £25 million less than previously stated.
The company said fixing its supply chain could cost up to £11 million while up to £25 million of wholesale revenue could be lost. Shares in the company fell nearly one-third on the day of the announcement. As one analyst told Reuters, it’s “another big migraine” for Dr. Martens, following a profit warning late last year as strikes at a UK port and labour shortages at the bootmaker’s Dutch distribution centre weighed on earnings prospects.
While perhaps an extreme case, Dr. Martens demonstrates how multiple pressures can hit a supply chain, with long-lasting and costly consequences. Though global supply chain snarls related to the Covid-19 pandemic have largely subsided, supply chain executives in the fashion industry surveyed by BoF Insights expect a range of pressures to persist into 2023 and beyond.
ADVERTISEMENT
Upstream factors are chief among future concerns, including the rising cost and availability of raw materials. At the same time, respondents have not shaken off the impact of the previous upstream challenges related to shipping and ports.
A key for brands now will be to take a targeted approach to strengthening specific parts of their supply chains, be it around people — such as appointing a chief supply chain officer — or processes — by introducing greater digitisation to mitigate last mile delivery issues.
For more insights on supply chain strategies, see the in-depth analysis from BoF Insights: Building Resilience and Value in Fashion’s Supply Chain.
BoF Insights is The Business of Fashion’s data and advisory team, partnering with leading fashion and beauty clients to help them grow their brands and businesses. Get in touch at insights@businessoffashion.com to understand how BoF Insights support your company’s growth for the long term.
Read the latest BoF Insights report to get BoF’s perspective on the state of the fashion industry’s supply chain model, plus data-driven guidance on how companies can strengthen their supply chains in the face of pandemic and geopolitical challenges.
The final segment of the e-commerce supply chain — getting orders to customers’ homes — is often the most difficult. From warehousing to speedy delivery, BoF dissects the components of a successful shipping strategy.
As supply chains remain under pressure, garment manufacturers have an opportunity to lean into vertical integration, nearshoring and small-batch production, while seeking closer upstream and downstream collaboration, according to The State of Fashion 2023.
Antitrust enforcers said Tapestry’s acquisition of Capri would raise prices on handbags and accessories in the affordable luxury sector, harming consumers.
As a push to maximise sales of its popular Samba model starts to weigh on its desirability, the German sportswear giant is betting on other retro sneaker styles to tap surging demand for the 1980s ‘Terrace’ look. But fashion cycles come and go, cautions Andrea Felsted.
The rental platform saw its stock soar last week after predicting it would hit a key profitability metric this year. A new marketing push and more robust inventory are the key to unlocking elusive growth, CEO Jenn Hyman tells BoF.
Nordstrom, Tod’s and L’Occitane are all pushing for privatisation. Ultimately, their fate will not be determined by whether they are under the scrutiny of public investors.