Dive Brief:
- PVH has hired David Savman as its new chief supply chain officer to start in October, according to a press release.
- At PVH, Savman will oversee supply chain and sourcing strategy for its brands, which include Tommy Hilfiger and Calvin Klein, and will report to CEO Stefan Larsson. He is set to begin in late 2022.
- Savman has worked at fast fashion giant H&M for the past 19 years, most recently as head of supply chain.
Dive Insight:
Savman is stepping into a position at PVH that is arguably more important and more prominent than it has ever been.
The current chief supply chain officer said last summer at a National Retail Federation panel, “I think we’re still going to be living through higher prices and shifting consumer behavior — and the change in agility is going to be the name of the game.”
That seems almost premonitory today, as a surge in consumer demand that pressured supply chains still grappling with the impact of COVID-19 snapped back under pressure from inflation. Brands and retailers this year moved from chasing inventory to trying to clear it in a matter of weeks.
At PVH, the apparel company was still working through COVID-19-related inventory delays in the first quarter, with management expecting inventory positions to improve in the back half of the year, Larsson told analysts in June, according to a Seeking Alpha transcript.
By the numbers, inventory was down 4% against last year at the end of Q1 and in-transit inventory levels were up 10% because of long-running supply chain disruptions, Chief Financial Officer Zac Coughlin said.
Moreover, PVH is still paying out the nose for airfreight — to the tune of $12 million in Q1, which mostly accounts for a 70 basis point hit to margins, executives said. The company also anticipates 150 basis points of margin pressure from product and ocean freight costs, which executives expect to offset with price increases, according to Coughlin.
One of the key initiatives at PVH is to build what Larsson called a “demand and data driven operating model” that ties inventory planning, buying and selling to consumer demand as a means to boost speed and flexibility.
Presumably, Savman will be a key figure in building that model out once he takes the reins as supply chain chief.
Savman comes from an organization where a fast-moving supply chain drove the entire company. His future boss, Larsson, also got his start at H&M and worked there for nearly 15 years in key leadership posts.
In the press release announcing Savman’s hire, Larsson praised the incoming supply chain executive for his “proven ability to simplify complexity, strong ability to create value through a demand and data driven value chain, deep experience in international markets and commitment to sustainability” and said Savman would play an important role in driving the company’s strategic plan forward.
