In a world that has been forced into digital first amid a pandemic that made outside a risk, digitally native brands and the manufacturers that make for them have at least had a leg up where that’s concerned.
As a manufacturing partner for digitally native brands, including Bonobos, Everlane and Stitch Fix, Hong Kong-based Lever Style goes against the grain by manufacturing smaller orders tailored to individual customers. And that may be a new and beneficial way forward for both sides of the supply chain.
“As brands get bigger and bigger, their products just become more of a commodity,” Stanley Szeto, executive chairman of Lever Style, told Sourcing Journal in its latest “On the Ground” video. “We can sort of start seeing that consumers want to look different and want to dress differently. Brands that are much better at catering to a smaller niche of consumer groups are growing.”
Large factories, he added, are going to have to go smaller, both in the brands they work with and the order volumes they manufacture. With larger traditional retail partners like J.Crew going bankrupt, many factories, Szeto said, will have to rely on a fewer number of these “commodity” brands and retailers to get consistent business going forward.
“A certain percentage of these large factories will have to shift, or they will have to scale down or go out of business,” Szeto said.
Asked whether today’s large-scale manufacturers can shift their business to create more SKUs and less units per SKU, however, he says it’s possible but won’t be simple.
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“The agility can be created,” he said. Even for us, the biggest challenge was getting our team to believe we could make money using small orders.”
Mills often require order minimums that are larger than what would be needed for a single run. But Szeto said brands can get around this with fabric platforming, or buying one fabric and deferring the decision of what styles and sizes will be cut from it.
“A lot of times we get the fabrics up front because our customer is willing to commit to that fabric, but they just don’t know the size assortment, the exact style and the exact quantities,” Szeto said.
This platforming strategy and the speeding up of the garment production process, he admits, is contingent on building a trusting relationship over time.
“One of the big brands once made us go online to bid to work with them, and the lowest-price bidder wins out of maybe 12 qualified vendors for that product category,” Szeto said. “For this kind of collaborative relationship, we can’t use that old way anymore.”
Check out more in Sourcing Journal’s new ‘On the Ground’ video series, which brings new and needed voices in the supply chain to the fore.