PVH Corp. will increase its U.S. warehouse capacity utilization to about 85% to 90% by consolidating its facility footprint into two warehouses and insourcing its e-commerce distribution operations, CFO Zac Coughlin said on an April 1 earnings call.
The Calvin Klein and Tommy Hilfiger owner's current capacity utilization is slightly above 50%, Coughlin said. The consolidation and insourcing push will help streamline the company’s logistics operations and result in "significantly decreased North America distribution expenses," he added.
PVH is closing its Jonesville, North Carolina, facility as part of the plan and shifting operations to its two warehouse and distribution centers in Georgia.
"This will allow us to take full advantage of the technical capabilities in our Georgia network and continue to respond to our consumers with speed," the company said in an emailed statement to sister publication Supply Chain Dive.
Layoffs for 317 employees at the Jonesville facility, including material handlers and equipment operators, are slated to occur between Oct. 3 and Dec. 31 as a result of the shift, according to a Worker Adjustment and Retraining Notification (WARN) Act notice filed in January.
The changes are part of PVH's broader goal to simplify its operating model and increase company-wide efficiencies. Other aspects of that plan include consolidating its technology stack into a single platform and selling a warehouse and distribution center, a transaction that took place in fiscal year 2024.
"We've laid the groundwork for these initiatives, and we expect to drive significant cost savings in 2025 on top of the reductions we already realized in 2024 with savings showing up more powerfully as we progress through the year," Coughlin said.
PVH's move to insource e-commerce distribution activity comes as supply chains continue to weigh whether to place fulfillment operations in-house or outsource them to third-party logistics providers. Insourcing can give companies more control over the shipping process. Outsourcing, on the other hand, can offer flexibility and upfront cost savings.
