Blog: Leonie BarrieCoronavirus continues to disrupt retail and supply chains

Leonie Barrie | 18 March 2020

The ongoing impact of the coronavirus (Covid-19) pandemic on the global apparel industry and its supply chain continued to dominate content on just-style over the past week. 

We look at why it’s resilience – not re-shoring – that clothing buyers should be seeking from their supply chains in the face of predictions that the Covid-19 outbreak could mark the end of multinational sourcing.

The epidemic is also casting a shadow on Central America's garment exports and deliveries, with Nicaragua now forecasting a full-year export decline and Guatemala also acknowledging its apparel shipments face delays.

UK clothing sales are set for further disruption over the coming months, with stock issues expected to appear as China accounts for over one-fifth of the country's apparel imports.

Specialty clothing retailer Gap Inc says it is likely to take a first-quarter sales hit of about US$100m due to the epidemic – and says it is working on contingency plans to tackle falling demand and supply chain disruption. 

While German sportswear giant Adidas says its sales will drop by up to EUR1bn (US$1.13bn) in Greater China in the first quarter, with a negative impact also now being felt in Japan and South Korea. And rival Puma says sales have been "severely affected" but that its global supply chain is only seeing minor delays.

The coronavirus outbreak is expected to have a larger and longer-lasting impact on imports at major US retail container ports than previously believed, as factory shutdowns and travel restrictions in China continue to affect production.

But although the full impact of the virus on US apparel imports from China is not yet apparent, the country booked the biggest double-digit drop in volumes in January.

Workers in Cambodia and Myanmar are among the hardest hit by fall-out from the Covid-19 outbreak, according to unions who are urging measures to protect them.

In other developments, US lawmakers have proposed legislation that will ban goods made with forced labour in China's Xinjiang region from entering the country.

The move coincided with a coalition of trade bodies representing US apparel and footwear brands and retailers calling on the US government to help find a solution that protects the right of workers and the integrity of global supply chains.

And AI enabled digital tools are taking personalisation and customer service to the next level, not just online, but in physical stores as well. Where does this leave supply chains?

Meanwhile, in other news, a new textile-to textile recycling technology has been brought to market; value fashion retailer Primark has become the first fashion company to receive the Vegan Certification mark; and Hong Kong based Crystal Group is teaming up with Better Work to scale the programme across the garment industry.

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