Vietnam is an important global exporter of textiles and garments, but the local COVID-19 epidemic continues to be severe, the number of confirmed cases has soared, and many regions across the country are under strict lockdown. Well-known multinational apparel brands including Nike, Gap and Urban Outfitters have all warned that the lockdown in Vietnam has led to tight inventory levels and may face a crisis of out of stock.
Axios and Business Insider reported that after the large-scale COVID-19 vaccine in the United States, people's lives have almost returned to normal. Even though the Delta variant virus has increased the number of confirmed diagnoses in the past few weeks, consumer demand remains strong. However, clothing retailers have warned that uncertain disturbances such as the lockdown of cities in Vietnam are the biggest stumbling block that hinders the continued rise of performance in the US market.
Urban Outfitters chief executive Richard Hayne said at last week’s earnings conference: “Our biggest concern right now is actually getting inventory.” Abercrombie & Fitch Chief Financial Officer Scott Lipesky also told analysts last week: “We are working hard to resolve the South Vietnam factory. The issue of extending the shutdown." "We will see how it turns out, but this is beyond our control."
Our World Data statistics show that before July this year, there were less than 2,000 new COVID-19 cases in Vietnam in a single day, but since the beginning of August, the number of new confirmed cases per day has soared to more than 10,000.
According to data from Bank of America, Vietnam is the main supplier of many large US clothing brands, including Gap and Lululemon. About one-third of the sources come from Vietnam. Nike has 51% footwear and 30%. The clothing is produced by Vietnam.
Experts pointed out that a few years ago, former U.S. President Donald Trump launched a trade war against China and imposed significant tariffs. At that time, retailers and manufacturers moved their production lines out of China, and Vietnam was the biggest recipient of the transfer order effect. Favor country.
Vietnamese media reported that Ho Chi Minh City, the economic center of Vietnam, is the most severely affected area in the country. At present, the Vietnamese government implements the "three-site principle" for the greater Ho Chi Minh area (including Ho Chi Minh City, Dong Nai Province, Long An Province, etc.), that is, the factory must arrange for employees to "produce on site, eat on site, and rest on site." Maintain production line operation.
The Vietnam Textile and Apparel Association (VITAS) stated that 30%-50% of local small and medium-sized textile and garment factories were forced to temporarily suspend operations due to the inability to implement the "three-in-place principle". The industry is a big blow.
https://technews.tw/2021/08/30/nike-gap-clothing-out-of-stock/
