Denim brand Levi’s plans to harness third-party logistics providers (3PLs) as it pivots to operating as a direct-to-consumer company.
As part of its second-quarter 2024 results, which saw Levi’s celebrate 8% growth in revenue, the brand reported DTC growth of 12% in the US, and a 7% increase in Europe. Revenues from ecommerce grew 19%.
With this focus on DTC, Levi’s will move from a primarily owned-and-operated distribution model to a 20-year partnership with GXO.
Harmit Singh, chief financial and growth officer at Levi Strauss & Co, explained: “As we continue our pivot to a DTC-first company, our distribution networks need investment including upgrading existing capacity with omnichannel capabilities.
“A new strategy allows us to secure these investments in a capital-efficient manner by leveraging third-party capital while freeing up our own resources to invest in growing the direct-to-consumer channel.
“This will also enable us to reduce our fulfilment costs per unit compared to running the facilities ourselves, while immediately delivering a cash infusion of over US$90 million this year, primarily as a reimbursement of the capital spent to build a new distribution centre in Germany.”
The fully-automated centre opened in June, featuring state-of-the-art shuttle and miniload systems, as well as automatic carton opening, closing and labelling.
Learn more about Levi’s DTC transformation and the innovation it is implementing in an exclusive case study, authored by Paul Skeldon, in the Europe Fashion Report.
The profile looks at the denim giant’s use of AI generated models, in a bid to boost diversity and elevate the customer experience.
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