Blog: Hannah AbdullaHow might Covid-19 affect apparel sourcing and trade

Hannah Abdulla | 8 April 2020

The fast spread of the coronavirus around the globe has created an unprecedented situation for the world economy. But how might Covid-19 affect apparel sourcing and trade? 

Bangladesh could stand to lose around US$6bn in export revenues as brands and retailers continue to cancel orders from the apparel sourcing major.

The Vietnamese textile and garment sector could see a VND11trn (US$467m) hit from the fallout of coronavirus, one of the country's main textile groups has said.

Tunisia's textile and garment sector is warning of major commercial and humanitarian damage because of production stoppages and order cancellations resulting from the ongoing coronavirus crisis.

Romania's clothing and textile industry is facing a recruitment crunch and experts worry that it will struggle to find a strategy to hire sustainably to ensure long-term growth.

Amidst the chaos of order cancellations and payment delays experienced by clothing manufacturers around the world due to the coronavirus crisis, the good news is that some brands and retailers are continuing to offer support to their suppliers.

UK value fashion retailer Primark has set up a fund to cover the wages component of orders that it cancelled in Bangladesh, Cambodia, India, Myanmar, Pakistan, Sri Lanka and Vietnam because of the coronavirus pandemic.

And Spanish fashion giant Inditex, which owns the Zara fashion chain, is to pay its Spanish workers their full salaries until 15 April – including those in its domestic factories.

After deteriorating at the quickest pace on record in February, factory activity in China rebounded in March – but orders fell as the pandemic worsened across the rest of the world.

A textile trade body in China has said the number of firms cancelling export orders is growing by the day, leading to increasing pressure on upstream firms' supply chains.

While US footwear brands are seeing a slump in consumer demand as the fallout from the coronavirus outbreak continues.

US apparel and footwear retailers and importers are cautiously optimistic at reports the Trump Administration is planning to stop collecting duties on imports for at least three months to help ease the economic fallout of the coronavirus.

The International Apparel Federation (IAF) is adding to calls for solidarity and collaboration by the apparel supply chain and its stakeholders – including governments and consumers – to reduce the damage to suppliers in the face of the coronavirus crisis.

At this time of crisis it's critically important that apparel brands and retailers avoid taking any drastic action that could sink the entire supply chain.

The fashion industry needs to re-think how it does business, in light of the impact of Covid-19, and purchasing practices must be reformed for social and environmental sustainability, a new academic paper has suggested.

Are we witnessing the end of globalisation? The simple answer is no. But there is a more nuanced response: globalisation will survive, but it will be different from what we've known.

Resources have been launched to help governments, suppliers and workers navigate the Covid-19 pandemic.

And just-style has a series of running articles to keep you up-to-date with the latest industry happenings related to Covid-19

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