Connect with us


What Factory Closures in Vietnam Mean for Fashion | BoF Professional, News and Insights




When On Holding launched its IPO this week, headlines focused on the target valuation of $ 6 billion of Swiss sportswear brands. But buried in the company’s file was one detail of greater relevance to the industry: The supply chain for the brand’s performance running shoes is largely locked down.

Almost 70 percent of the company’s factories in Vietnam where all of its shoes were made during the six months ending June 30 have been shut down, the company said on a public record. Due to the restrictions leading up to its listing, We declined to comment further.

Vietnam is in the throes of a severe Delta variant Covid-19 epidemic. In July, Hanoi and Ho Chi Minh entered strict bans that are still in place. Although factories were allowed to continue operating if they provided on-site accommodation or transportation for workers, many were unable to meet the expenses or had to close after employees tested positive.

The disruptions had a severe impact on an increasingly crucial manufacturing center that came to dominate the global sneaker market; Vietnam was the world’s largest exporter of athletic shoes in 2019, according to the Observatory of Economic Complexity, an online data platform.

Companies accounting for 62 percent of the total export value of Vietnam’s textile and clothing sectors have had to suspend production, the Vietnam Textile and Clothing Association (VITAS) said on August 4. [longest] at a major manufacturing center that happened during Covid-19, said Winnie Leung, a professor at Torontos George Brown College, who specializes in producing sustainable fashion.

Extended shutdowns have important implications for big brands. Vietnam was Adidas’ top sourcing country in 2020, accounting for 28% of the brand’s total production volume, according to its second quarter 2021 results. Almost half of U.S. maritime imports related to Nike products in the second quarter 2021 came from Vietnam, according to data from Panjiva, a division of S&P Global Market Intelligence. About 15% of global production volumes of Pumas come from the country, said senior director of corporate communications Robert-Jan Bartunek.

The current shutdown in Vietnam could be the longest at a large manufacturing hub that occurred during Covid-19.

A recent report from S&P warned that Nike might run out of sneakers made in Vietnam. Nike did not respond to a request for comment.

It is not known whether the current crisis will lead to a global sneaker shortage. It will depend on the depth [a brands] is going and how lean their supply chain is, said Andy Halliwell, senior director of retail at digital consulting firm Publicis Sapient, adding that players with diverse manufacturing bases would fare better than others.

American brands were particularly affected. Vietnam accounted for about 40 percent of U.S. imports by sea in the year through July 31, according to Panjiva. In August, the American Apparel and Footwear Association (AAFA), an industry trade group, urged President Biden to speed up the supply of vaccines to the Americas in Vietnam and other partner countries.

The success of the U.S. apparel and footwear industry, and our 3 million U.S. workers, is directly dependent on our suppliers around the world having a healthy workforce, says the AAFA letter to Biden.

In the meantime, brands like On, Puma and Adidas are reallocating resources to other centers and regions. Costs could increase in the short term, but for companies like Nike, meeting demand is more important than a run-out, Leung said.

The Vietnamese government aims to curb the epidemic by September 15. But Pumas management expects the shutdown to be extended by at least two weeks, Bartunek said. The company is not ruling out the possibility of a delay of four or even six weeks, he added. Adidas expects a chance that the shutdowns will last until the end of the third quarter, chief executive Kasper Rrsted told analysts on the company’s latest earnings conference call last month.

The outbreak adds to a litany of disruptions, such as port closures in China and shipping delays in the United States, which are already compressing supply chains and increasing costs. They also add to the uncertainty that is likely to haunt the market until next year, with securing inventory likely to prove to be a bigger challenge than increasing freight rates, according to the bank. Cowen investment. Brands will face continued pressure to diversify and adapt.

This is a new disruption in a world of escalating supply chain disruptions, Halliwell said. Lighter supply chains of brands and retailers with reduced working capital simply cannot absorb the impact of a series of black swan-style events like this.

Related Articles:

How fashion can cope with the crisis in its supply chain

In Fashions’ global supply chain, a ruthless race to the bottom




The mention sources can contact us to remove/changing this article

What Are The Main Benefits Of Comparing Car Insurance Quotes Online

LOS ANGELES, CA / ACCESSWIRE / June 24, 2020, / Compare-autoinsurance.Org has launched a new blog post that presents the main benefits of comparing multiple car insurance quotes. For more info and free online quotes, please visit https://compare-autoinsurance.Org/the-advantages-of-comparing-prices-with-car-insurance-quotes-online/ The modern society has numerous technological advantages. One important advantage is the speed at which information is sent and received. With the help of the internet, the shopping habits of many persons have drastically changed. The car insurance industry hasn't remained untouched by these changes. On the internet, drivers can compare insurance prices and find out which sellers have the best offers. View photos The advantages of comparing online car insurance quotes are the following: Online quotes can be obtained from anywhere and at any time. Unlike physical insurance agencies, websites don't have a specific schedule and they are available at any time. Drivers that have busy working schedules, can compare quotes from anywhere and at any time, even at midnight. Multiple choices. Almost all insurance providers, no matter if they are well-known brands or just local insurers, have an online presence. Online quotes will allow policyholders the chance to discover multiple insurance companies and check their prices. Drivers are no longer required to get quotes from just a few known insurance companies. Also, local and regional insurers can provide lower insurance rates for the same services. Accurate insurance estimates. Online quotes can only be accurate if the customers provide accurate and real info about their car models and driving history. Lying about past driving incidents can make the price estimates to be lower, but when dealing with an insurance company lying to them is useless. Usually, insurance companies will do research about a potential customer before granting him coverage. Online quotes can be sorted easily. Although drivers are recommended to not choose a policy just based on its price, drivers can easily sort quotes by insurance price. Using brokerage websites will allow drivers to get quotes from multiple insurers, thus making the comparison faster and easier. For additional info, money-saving tips, and free car insurance quotes, visit https://compare-autoinsurance.Org/ Compare-autoinsurance.Org is an online provider of life, home, health, and auto insurance quotes. This website is unique because it does not simply stick to one kind of insurance provider, but brings the clients the best deals from many different online insurance carriers. In this way, clients have access to offers from multiple carriers all in one place: this website. On this site, customers have access to quotes for insurance plans from various agencies, such as local or nationwide agencies, brand names insurance companies, etc. "Online quotes can easily help drivers obtain better car insurance deals. All they have to do is to complete an online form with accurate and real info, then compare prices", said Russell Rabichev, Marketing Director of Internet Marketing Company. CONTACT: Company Name: Internet Marketing CompanyPerson for contact Name: Gurgu CPhone Number: (818) 359-3898Email: [email protected]: https://compare-autoinsurance.Org/ SOURCE: Compare-autoinsurance.Org View source version on accesswire.Com:https://www.Accesswire.Com/595055/What-Are-The-Main-Benefits-Of-Comparing-Car-Insurance-Quotes-Online View photos


to request, modification Contact us at Here or [email protected]