Wholesale isn’t what it used to be.
Once serving as one of the more predictable apparel channels, wholesale has been disrupted by many of the same familiar forces shaking up the rest of the industry: trade uncertainty, sustainability concerns and increasing consumer expectations. As such, it’s become crucial that wholesalers remain as nimble and as diversified as direct-to-consumer brands in order to be successful.
For Delta Galil, diversification is more than just a strategy—it’s a way of life. The apparel company operates under a three-pronged business model that differentiates itself from much of the competition. One prong consists of its wholesale model of proprietary and licensed brands that it sells directly to its retail partners. The second is its direct manufacturer business in which it works with almost all of its own competition, including Calvin Klein and Spanx, while the third is its direct-to-retail model that includes such partners as Victoria’s Secret.
Victoria Vandagriff, president of D2 Brands at Delta Galil U.S., will join a panel at Sourcing Summit New York on Oct. 17 to shed more light on how her company is diversifying and positioning itself for growth. Sourcing Journal caught up with Vandagriff to learn more about Delta’s strategy and how it’s adjusted during these evolving times.
When Delta is seeking the best methods to help it adapt and grow with the ever-changing market, one way it does so is with new licensing opportunities and/or acquisitions that bring the company into a new and different distribution channel, she said.
The entrances have “to fill a void for us in some way versus cannibalizing our other brands and businesses,” Vandagriff said.
Although Delta had held a strong presence in the kids, men’s and women’s underwear, sleepwear, and sock categories, it was not highly penetrated in the structured bra category, Vandagriff said. Given the significance of bras within the intimates market, the company knew that needed to change. In June, Delta signed an agreement to acquire The Bogart Group, which Vandagriff said is one of the top five bra manufacturers in Asia.
“It was a strategic acquisition, because some of their largest customers are our largest customers,” she said. “So it was a synergistic acquisition. But it’s also completed our stable of skill sets and expertise.”
Another crucial step in its strategy has been has been prioritizing sustainability within its manufacturing, and this is a primary issue Vandagriff said has been a consistent demand from all of the company’s retail partners.
“It’s no longer a ‘Let’s have a little blurb about the fact that we’re GRI Certified.’ That’s not good enough anymore,” she said. “The consumer wants to know what we’re doing as a brand and as a manufacturer. Particularly millennials, and Gen Z—they demand to know. And it is important to them, so all of our brands have made this an absolute.”
At the same time, wholesalers are still uncovering how to manufacture products using more eco-friendly raw materials without passing along the higher costs to the consumers.
“Our big challenge right now is trying to figure out how to commercialize that [practice] because the customer doesn’t want to be penalized for saving the environment in the future and being accountable,” Vandagriff noted. “They don’t want to be penalized for that, so they don’t want to pay more for the product. That’s our big challenge when it comes to sustainability—not how to do it. It is a different way of thinking, and I think it will be the norm.”
Hear Vandagriff speak on the Sourcing Summit New York panel, “Repositioning: The Future of the New Wholesale Model.” Visit our event page for more info and to buy tickets.