Fluctuating tariffs, freight volatility, shifting sourcing maps and changing compliance requirements are all reshaping global sourcing, but the key, according to Dillard’s, is to “stay the course.”
That was the advice from Tony Anzovino, director of product development, operations and sourcing at Dillard’s, who joined Edward Hertzman, founder of Hertzman Global Intelligence (HGI), on a recent panel at Sourcing by Informa at MAGIC in Las Vegas.
“For Dillard’s, the biggest thing is don’t panic,” said Anzovino. “Will something happen tomorrow? Probably. But we’ve stayed the course. We stayed with most of our vendor base. If you let tariffs dictate where you’re going to jump to, then you’re always onboarding a new vendor to build the product.”
Drastically moving production around the globe in response to tariffs can often “solve one problem while creating several others,” including uncertainties on new product development, quality, compliance, lead-time and relationship challenges.
Many brands lost sight of that as they scrambled to lower costs by shifting out of China. What they found is that the factory price isn’t the end price and alternative markets couldn’t consistently deliver the combination of price, quality, capacity and capabilities they were used to.
“Smart sourcing decisions ultimately come down to landed cost, which is increasingly difficult to predict as tariffs and logistics costs fluctuate,” said Robert Krieger, president and chief executive officer of logistics company Krieger Worldwide. Factor in freight, duties, port disruptions, container availability and extended lead times, and that lower factory cost suddenly adds up. The key is to ask the right questions before shifting, not as an afterthought.
“How many weeks does it take to get from Bangladesh to the West or East Coast? What are the capacities? How reliable is Africa? Clients aren’t always asking these questions until things go into production, when it’s too late,” said Krieger, noting that not all companies charted as steady a path as Dillard’s.
Relationships, Relationships, Relationships
Anyone who’s been burned by an overly transactional supply chain has learned the hard way that relationships—across the entire supply chain—matter, especially when capacity is tight, logistics networks are disrupted or someone at the port is “doing someone else a favor.”
“I used to say, ‘date your forwarder but marry your broker,’” said Krieger. “But now I say ‘marry your forwarders and your brokers.’”
If you truly partner with your vendors, you’re also in a better position to negotiate sharing price increases as tariffs move up and down. For Dillard’s, maintaining product quality is paramount so as “not to disappoint the customer.”
Dillard’s did shift some production around after Liberation Day, but kept it within its existing vendor base and didn’t change much on the back end. “The reason we’ve been consistent with factories is so when logistics or tariff issues happen, we’re top of mind with our factories and supply chain,” he said.
Even more important is building relationships before a crisis, not during one, especially for smaller brands that can’t throw their weight around like the big guys.
Relationships also come into play for the increasingly important speed to market. That means working with partners who can have raw materials, fabric, trims and other inputs ready to help shorten production timelines.
“You can’t have speed without trust,” said Anzovino. “You also can’t have speed if someone doesn’t own something, so you need to plan and pre-position, whether in greige goods, dye forms, etc. You need to have things in place.”
Once you have the speed, you need the visibility, especially as Customs scrutiny increases. “If your goods get stuck in Customs, a lawyer is going to charge so much and it can take months to get your goods released,” said Krieger, urging brands to stay informed through industry organizations and state-level resources rather than waiting until new regulations affect production.
Looking ahead, Vietnam remains particularly strong, Pakistan is gaining momentum in denim, Bangladesh continues to expand, and Indonesia is becoming increasingly relevant. India remains a strong sourcing market, while Madagascar and Mauritius are important to Dillard’s for qualifying products benefiting from tariff-free treatment under the African Growth and Opportunity Act (AGOA), which is up for renewal at the end of the year.
“But as mill bases start to move, China could make a comeback,” said Anzovino, even with higher tariffs. “Things might migrate back to China. They have a lot of capacity and you can get great price and quality.”
