PVH Corporation (PVH), which owns well-known brands including Calvin Klein, Tommy Hilfiger, Van Heusen, Arrow, and Izod, is one of the largest US fashion companies with nearly $9.2 billion in sales revenues in 2022.
By leveraging PVH’s publically released factory lists, this article analyzes the company’s detailed sourcing strategies and changes from 2021 to 2022. Key findings:
Trend 1: PVH adopts a diverse apparel sourcing base and continues to work with more vendors. Specifically, in 2022, PVH sourced apparel from as many as 37 countries in Asia, Europe, America, the Middle East, and Africa, the same as in 2021. Despite not expanding the number of countries it sources from, PVH increased its total number of vendors from 503 in 2021 to 553 in 2022, highlighting the company’s ongoing commitment to diversifying its sourcing base.
Trend 2: Asia is PVH’s dominant sourcing base for finished garments and textile raw materials.
Specifically, about 56.2% of PVH’s apparel suppliers were Asia-based in 2022, followed by the EU (20.3%). Compared with a year ago, PVH even added twenty new Asia-based factories to its supplier list in 2022, suggesting no intention of reducing sourcing from the region. Moreover, From 2021 to 2022, as many as 83% of PVH’s raw material suppliers were Asia-based, far exceeding any other regions.
Trend 3: PVH’s China sourcing strategies are evolving and more complicated than simply “reducing China exposure.”
- First, PVH continued to work with MORE Chinese factories. Specifically, between 2021 and 2022, PVH added 17 Chinese factories to its apparel supplier list, more than other countries. However, the expansion could be because of PVH’s growing sales in China.
- Second, PVH’s garment factories in China are smaller than their peers in other Asian countries. For example, in 2022, most PVH’s contracted garment factories in top Asian supplying countries, such as Bangladesh (87.5%), Vietnam (63.3%), and Sri Lanka (65.3%), had more than 1,000 workers. In comparison, only 11.3% of PVH’s Chinese vendors had 1,000 workers, and more than 62.5% had fewer than 500 workers. The result suggests that PVH treats China as an apparel sourcing base for flexibility and agility, particularly those orders that may include a greater variety of products in relatively smaller quantities.
- Further, PVH often priced apparel “Made in China” higher than those sourced from the rest of Asia.
Trend 4: PVH actively used “emerging” sourcing destinations outside Asia. Other than those top Asian suppliers, PVH’s apparel sourcing base includes several countries in America, the EU, and Africa that deserve more attention, including Portugal, Brazil, Tunisia, and Turkey. Overall, PVH sourced from these countries for various reasons, from serving local consumers, seeking sourcing flexibility, accessing raw materials, and lowering sourcing costs.
by Sheng Lu and Ally Botwinick
Further reading: Lu, Sheng & Botwinick, Ally (2023). US fashion companies’ evolving sourcing strategies – a PVH case study. Just-Style. Retrieved from https://www.just-style.com/features/us-fashion-companies-evolving-sourcing-strategies-a-pvh-case-study/
2 thoughts on “New Study: PVH Corporation’s Evolving Apparel Sourcing Strategies”
This article was very interesting to me after reading the Fashion Industry Benchmarking Study for one of our assigned readings. In the Fashion Industry Benchmarking Study, it touched upon similar themes mentioned in this article, including the fact that many retailers are diversifying their sourcing portfolio and shifting away from China as a main sourcing location. It is interesting to see a company with some of the most well-known brands following exactly what was talked about in the other article.
Besides that, I find the fourth trend to be incredibly interesting, with PVH looking outside the usual countries to source from. I remember in class touching upon Turkey as a potential new sourcing destination, and I find it smart for PVH to continue to diversify their sourcing locations to get the best products. I am interested to see if more well known or large companies will follow suit with choosing to source from more “emerging” sourcing destinations.
Thank you for sharing your great thoughts. When analyzing the data, we found it interesting that PVH worked with MORE factories in China from 2021 to 2022. This differs from the perception that US companies are “reducing China exposure.” However, the result makes sense after checking PVH’s corporate strategy, which still sees China as an emerging sales market. Increasingly, US companies may choose to develop a sort of “dural” supply chain, i.e., “Made in China for China,” and “Made in the rest of the world” for the main US and EU markets.
I would love to see more fashion companies release more detailed factory-level data, which provides new opportunities to understand the supply chain beyond the macro trade data.