Most stores across China were closed during February

Most stores across China were closed during February

Puma says its global supply chain is in the clear with regard to the coronavirus (Covid-19) outbreak, adding it is not currently at risk apart from minor delays.

The German sportswear firm notes within China, all of its Tier 1 (finished product) supplier factories are open again and are operating at 80%-100% capacity. Almost all its Tier 2 (material) factories are also up and running. 

Puma's outbound logistics are largely in operation with all seaports now open and most transportation on land – from the factories to the seaports – functioning normally again.

The update follows a warning last month that the outbreak would hit its first-quarter numbers.

It now says sales have been "severely affected" in China where most of both owned and operated, as well as partner stores, were temporarily closed in February due to restrictions imposed by local authorities.

"There are now early signs of improvement," it adds. "Most of our stores in China and those of our partners are now open again. Traffic that had initially been extremely low picked up over the weekend. Other Asian markets such as Singapore, Malaysia, Japan and South Korea, which typically benefit from Chinese tourists, continue to see heavy negative effects on sales. 

"Additionally, the virus is spreading into other parts of the world. Despite the spread of Covid-19 in Europe, almost all our stores there are still open. Those in Northern Italy operate under reduced opening hours as enforced by the authorities. Across Europe, we register significantly lower footfall traffic.

"The outlook we gave on 19 February for the full year 2020 was based on the assumption that the situation regarding the Covid-19 virus would normalise in the short term. Given the duration of the situation in China, the negative impact in other Asian countries and now also the spread to Europe and the US, we, unfortunately, have to conclude that a short-term normalisation will not occur."

Several brands and retailers have expressed concern in recent weeks over the impact coronavirus is likely to have on sales in the short-term, but also supply-chain disruption.

Click here for additional insight on the coronavirus outbreak: Is coronavirus a threat to the clothing industry?