Oxford Industries Inc. SWOT and PESTLE Analysis

Strength

1. Omnichannel capabilities with sales through retail stores, e-commerce website and distribution channels: During the fiscal year 2020, 77% of the net sales of the company were through direct-to-consumer channels of distribution which consisted of 187 brand specific full price retail stores, e-commerce websites, 20 Tommy Bahama food and beverage location as well as 35 Tommy Bahama outlet stores. During the fiscal year 2020 ecommerce, retail and restaurant operations accounted for 43%, 27% and 7% of the net sales respectively compared to the fiscal year 2019 where the net sales percentage was 23%, 39% and 8% respectively. The company’s direct to consumer operations provides it with the opportunity to interact directly with the consumers and provide a broad assortment of products. The remaining 23% of the net sales of the company was generated from the company’s wholesale distribution channels. The wholesale distribution channels of the company provides access to a larger group of consumers.

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Weakness

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Opportunity

1. COVID 19 has propelled e-commerce business resulting in increased profitability: During the fiscal year 2020 e-commerce sales represented 43% of the total net sales whereas in the fiscal year 2019 it only represented 23% of the total net sales. In the fiscal year 2020, the total e-commerce net sales stood at $324 million. The growing e-commerce business is very profitable for the lifestyle brands since each brand has average e-commerce order values in excess of $100 and a high full-price gross margin in the 70% range. This provides a substantial amount of profit which is used to pay for the incremental picking, packing and freight expense associated with an e-commerce sale. Tommy Bahama, which accounts for a major portion of the company’s revenue has recorded net sales of 36% via e-commerce platforms in the fiscal year 2020 as compared to 20% in the fiscal year 2019.

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Threat

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Political

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Economic

1. US-China trade war impacts the company as a significant share of the company’s producers are in China: US President Donald Trump accused China of unfair trading practices and intellectual property theft. In China there is a perception that America is trying to curb its rise as a global economic power. This led to the US-China trade war where both the countries imposed heavy tariffs on each other’s goods. Even under the Biden Administration the US-China trade war continues. The production of the company’s apparel and related products have a significant concentration in Asia specially China and Vietnam. For the fiscal year 2020, the percentage of products sourced from China for the brands Tommy Bahama and Lily Pulitzer were 48% and 28% respectively. This was a significant decrease from the fiscal year 2019 and it is expected that the percentage of products sourced from China will further decrease. Moreover, the US Government has issued withhold release orders in response to concerns regarding forced labour in the Xinjiang Uyghur Autonomous Region of China. Since the company’s manufacturing operations are concentrated in China and cotton is among the principal raw material used in many of the company’s goods. The presence of perception of forced labour in the supply chain of the company could negatively impact its business including detention of goods at US entry points.

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Social

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Technological

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Legal

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Environmental

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