COVID 19 and Its Impact On Textile and Apparel

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The unprecedented outbreak of deadly COVID19 has shaken the entire globe in the last few weeks and has almost paused most business activities including manufacturing, services and retail.  Textile and Apparel industry has been also hard hit due to Covid 19 badly.

In the month of December, when many reports suggested the detection of COVID19 in China, the world didn’t seem that serious, but as the time passed and everyone learnt about this contagious virus, global leaders started taking action – a little too late. It is sad to see that most of the nations could not understand the enormity and gravity of the situation and kept on delaying important decisions on social distancing to save the economy.  But with these delayed actions , thousands of lives are being lost and the economy is bleeding profusely. Most governments are so enamored of keeping economy before people that they have hurt both .

Looking at our industry , it is facing probably the toughest time ever in last 100 years. Even the wars did not make such an impact what we can see now  with major global retailers closing down their stores and cancelling orders.

The movement has been restricted, social distancing has been imposed and enforced, stock exchanges are plunging, factories are getting closed, orders are either being canceled or being postponed, are we heading towards the biggest global recession?

COVID 19 and Its Impact On Textile and Apparel | Denimsandjeans

A lot of fashion shows and exhibitions have been either canceled or postponed in the past few days, which may lead to delays in making sourcing decisions. The delivery of upcoming Spring Season and Autumn-Winter has been already delayed due to the disruptions  and post the travel restriction, the delay may add some more months or weeks.

In these challenging times, we thought to bring some recent developments in the textile and apparel industry which took place due to the outbreak of COVID 19.

China, which happened to be the epicenter of the outbreak, is also one of the biggest consumers and also the suppliers of clothing and textile. From January 2020, many global brands started to restrict its operation which later converted into complete shutdowns. Here is how the outbreak of COVID 19 impacted the sales of apparel around the world.

  1. Gap Inc provisioned $100 million sales hit for Quarter 1
  2. Adidas is expecting sales to drop by up to $1.13bn in Greater China in the first quarter.
  3. Ralph Lauren has provisioned the sales drop of up to US$70m for Q4 2019-20
  4. PVH Corp has temporarily closed the majority of its Calvin Klein and Tommy Hilfiger stores in China.
  5. Under Armour is expecting a sales hit of up to $60m on first-quarter sales in the APAC region. 6. VF Corp says about 60% of its owned and partner stores in China have been temporarily closed.
  6. Uniqlo closed 225 stores in mainland China to limit the outbreak intially ,however they have opened all their stores located outside the Whuan last week.
  7. The company, which owns Michael Kors, Versace and Jimmy Choo, has closed 150 stores in China and projects its revenues in the next quarter will drop by $100 million.

COVID 19 and Its Impact On Textile and Apparel | Denimsandjeans

The situation is now improving in China and the government has announced to lift all kinds of ban from Whuan w.e.f April 8th. Theaters and other public transports are gradually resuming and as the time passes, things will be recovered rapidly.

Hermès International CEO Axel Dumas said he foresees “potential normalization” of operations with seven of its 11 stores in China beginning to resume operations.

After China, the invasive and insidious COVID 19 imploded in the month of March in Europe and Iran followed by the USA. The scale of the outbreak has been colossal and forced the countries to enforce complete lockdown and social distancing which forced many buyers to either cancel orders or postpone them till further notice. Bangladesh and Pakistan – two of the large apparel exporters are facing the toughest times with most of their European orders getting cancelled . Bangladesh is particularly facing this huge problem.

Rubana Huq, president of the Bangladesh Garment Manufacturers and Exporters Association appealed to buyers not to cancel their orders in Bangladesh.

“Most brands are putting the orders indefinitely on hold and canceling. They are also canceling orders that are scheduled to be shipped now. For them it’s a question of the survival of the businesses, for us it’s the survival of our 4.1 million workers,” she says.

  • The shutdown of major buying regions including the USA, Europe and some countries in SEA is actually putting at risk the livelihoods of garment workers, who are already some of the most vulnerable workers in the global economy.
  • Most of the fashion stores in the USA and Europe are either closed or operating for limited hours which led to a drastic fall in the clothing demands as the households have paused their spending on non-essential things.

COVID 19 and Its Impact On Textile and Apparel | Denimsandjeans

Janne Einola,  H&M India , in his linked post wrote about closing all stores in India .

“Right now we’re facing a situation that no one could really prepare for. In these times of uncertainty, we’re following the advice from the government and local authorities. We’re adapting to ever-changing situations, and are truly grateful to have fantastic teams collaborating to support our customers, colleagues, and partners across India.
In response to the prevention and control of the disease outbreak, we are closing all the H&M stores across India, in shopping malls and street locations till 31st March 2020. Please stay safe and take care of one another, wherever you are”.

“The info from the brands is more like tip of the iceberg. The deluge is on the way and we all need to be prepared for it. We need to be stronger and we need to find ways to support each other as much as possible. This bad phase will pass but we will all need each other after this. Hoping and praying that we all come out of this situation with minimum damage ” – Sandeep Agarwal 

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