Dive Brief:
- Lifetime Brands is ramping up production capacity at its Mexico facility in an effort to reduce its “exposure to supply chain issues in China,” CEO Robert Kay said in a March 12 earnings call.
- The plastics manufacturing facility in Mexico is currently fully operational and is on track to reach full capacity this year, the CEO told analysts.
- “Combined with other sourcing initiatives, we are well on our way to meeting our previously stated target of approximately 25% of our spend on goods being outside of China by the end of the year,” Kay said.
Dive Insight:
Lifetime Brands has been making efforts to expand its sourcing capabilities outside of China for quite some time, leading the company to Mexico along with other countries in Asia, according to recent earnings calls.
Kay told analysts in May that Lifetime Brands acquired manufacturing operations in Mexico, allowing the company to manufacture some of its plastic-loaded kitchenware products in the country and import them into the U.S. duty free.
Mexico’s nearshoring wave has been gaining momentum with logistics investments and manufacturing activity as shippers look to strategically shift their supply chains in the face of geopolitical tension and other global risks.
The kitchenware and homegoods company also noted that it experienced no supply chain disruptions in Q4 but is currently monitoring possible issues stemming from geopolitical challenges in the Red Sea, which have already had some initial impact on freight costs and shipping times, Kay said.
Lifetime Brands mentioned in several earnings calls the impact of retailers altering inventory and distribution strategies in response to oversupply.
“With another quarter of normalized shipment and ordering activities now behind us, we believe that the oversupply issues our retailers experience coming out of the pandemic have dissipated,” the CEO said in Q4.
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