China clothing firms fear slowdown in Japan orders

CHINA: Clothing firms fear slowdown in Japanese orders

By just-style.com | 25 March 2011

Chinese textile and clothing companies supplying the Japanese market are concerned about a sharp drop in profits in 2011, as Japan's economy suffers following the earthquake and tsunami earlier this month.

"I think orders will drop about 10% to 15% this year from 2010," Kitty Huan, general manager of Shanghai Hebo Industry & Trade, whose major clients include high-end Japanese fashion houses Onward Kashiyama and World, told just-style.

"We are actually lucky because our clients are in Tokyo and Osaka [not the devastated north], so orders are still coming, though much less," she said, adding some Chinese mass market clothing exporters to Japan have lost so many orders, they are almost out of business.

"Their clients have all pulled back," she said.

Things look better at sportswear manufacturer Shanghai Challenge Textile, whose Japanese clients contribute about 30% of its annual sales.

"We got enough orders before the disaster, so right now we are not worried," said Daisy Dai, sales at the company. "But it's hard to say how things could be like in the second half of this year."

That said, export analysts are predicting the disaster's economic impact will probably not last long.

"Manufacturers will surely see their order books getting thinner over the next several months as Japanese consumers will have much less interest in shopping after the quake," Xiong Xiaokun, analyst at Shenzhen-based research firm CIConsulting, told just-style.

"But in the long run, say next year, the orders will likely be boosted with Japan's recovery," he added.

By Wang Fangqing.

Sectors: Apparel, Fibres & fabrics, Manufacturing, Retail, Sourcing