A 75-year-old company that designs, manufactures and markets branded apparel for 300 retail partners from all channels of distribution, The Levy Group is a good barometer of how major companies are responding to the COVID-19 pandemic. We spoke with Michael Fernandez, group president and CMO of The Levy Group, about business, mentors, and plans for the future.
Q: How’s business at the moment?
A: Spring businesses were strong until a short time ago. Now, none of our retail partners are traveling and many have temporarily shuttered their doors. Key retailers are making critical decisions about on-order, office re-start dates, overall preparedness, decisions that will ultimately guide their future in these unprecedented times. In speaking to many of the industry’s leaders, there’s general consensus that much will change relative to the landscape of our business. Certain regional retailers with targeted distribution were ramping up sales based on strong business before the hard decision came to halt shipments from all vendors in all categories. The club and e-commerce businesses are doing well, experiencing growth in both membership and sales, which should propel them to an even stronger future.
As for the 150+ employees in our New York office, most are now working from home. Our California office is under statewide quarantine, and we’re all adapting to the new normal, making business decisions remotely via facetime and zoom. The safety of our employees is paramount so we’re heeding the guidance of state, federal and local officials.
Q: What is your biggest challenge?
A: Getting through this global pandemic. Many factories are still operating under capacity but that’s improving daily. However, even before the crisis escalated here, the pandemic was impacting shopping centers in the city (Herald Square, Union Square) and across the country, as business migrated online.
Q: Are you worried about supply chain issues; are you producing fall goods?
A: Obviously, this is the time to be fiscally conservative and prudent. And, of course, you can’t be solely reliant on Chinese manufacturing these days. We’ve been diversified outside of China for quite some time now and continue to explore options. Vietnam, Myanmar, Madagascar, Egypt, Indonesia, Jordan, Haiti, and Bangladesh continue to grow in capacity. Of course, most fabrics in today’s market are from China so it’s a fluid model. Supply chain nuances like quarantined fabric and delayed customs checks are now the norm. The good news: few retailers returned their leftover inventory of last year’s winter outerwear, which should help compensate for early fall receipts that could be delayed from various resources.
Q: What are your plans moving forward?
A: Our corporate goal has been, and continues to be, to diversify beyond outerwear, which has historically been most of our business. It still contributes a significant share, but we continue to grow the other categories despite difficult market conditions these past four years. Dresses, activewear and men’s tailored were some of our first additions; we’ve since added swimwear and outdoors, also performing well. Sperry, Caribbean Joe, Outdoor Life, Hickey Freeman, and other branded ventures lead the way.
Our strategy involves merchandising into key silos, bringing all of our brands together within each category. This ensures a stronger impact and minimal duplication by distribution channel and tier.
The other interesting thing we’ve done is to hire/move talented designers to a different category than they’re used to so they can approach that business without baggage or preconceptions. For example, we recently reassigned one of our key designers to Caribbean Joe. We sent her to a Beall’s store in Florida and after one visit, she ditched her dark color, city-sophisticated vision and came up with a fabulous, colorful, feminine collection. We want our designers to push the envelope from within. Part of the problem lately has been too many versions of the same thing.
Q: You’re known to have a strong e-commerce platform; is this helping or hurting your wholesale business?
A: We actually have three e-commerce platforms managed by our own dedicated team of 10; we sell direct via the individual brand platforms, via drop-ship, and with key retail partners like Amazon. The business was evolving online even before the pandemic and will continue even stronger afterward.
Q: Could you speak briefly about the corporate culture at The Levy Group?
A: It’s still a family business with four very involved partners: Donald, Gary, Louis, and Larry Levy. Max and Nick Levy, our 4th generation leaders, are approaching the businesses they manage with energy and innovative ideas. Dawn Levy has proven to be a powerhouse women’s designer.
Among the corporate initiatives I’m most proud of: our charitable ventures. Generation NXT is a program that inspires young adults and teens to get involved with social, health and environmental issues. The THANC Foundation is committed to supporting research and education in early detection and treatment of thyroid, head and neck cancer.
Q: Do you have a personal business hero or mentor?
A: My father Manny Fernandez, a 42-year former JCP executive, is my ultimate role model. But I’ve been lucky to work with some of the greatest people in our industry. One of my former bosses, Paul Rosengard, once advised, “Don’t aspire to be exactly like any of your bosses. We all do some things right and some things wrong. You can learn from both so your goal should be to take the best from each of us.” This advice is truer today than ever and has guided my approach to leadership.
I truly admire TJX and how that company uses great leaders like Norm Canton to mentor the next generation of managers and buyers.
My personal mentor early in my career was Oscar Feldenkreis of Perry Ellis International, one of the most talented, detail-oriented and charismatic leaders I’ve worked with. Oscar and his dad are constant reminders of what one can accomplish with hard work and determination. As a Cuban American myself, I am forever thankful for their inspiration.
Today, I feel fortunate to work next to Donald Levy, who I learn from every day. Very few companies can say they’ve been in business for 75+ years, surviving every curve ball thrown at them. To be flexible and fluid within a framework of conservative growth and financial strength is why we’re well-positioned for the future.