China’s outbreak of Coronavirus has fashion companies scrambling. The store closures and travel restrictions it’s causing are already putting a dent in sales inside and outside the country. Just as disruptive may be the impact the virus is having behind the scenes in global supply chains.
China is the world’s largest garment producer, and fashion companies around the world rely on it to make a substantial share of their clothes. But even companies doing their cutting and sewing elsewhere often depend on China for fabrics and trims such as the cords, appliques, and more needed to finish products before they’re ready to sell. Factories around China have closed due to the virus, however, creating production delays likely to have effects even after the epidemic has subsided and stores there welcome shoppers again.
Right now, it’s anyone’s guess when factories will fully reopen. “The answer is no one knows,” Edward Hertzman, founder and president of fashion trade publication Sourcing Journal, said on a call about coronavirus’s supply-chain impact hosted by investment bank Cowen and Co. yesterday. Sources he spoke with in countries such as Vietnam and Pakistan were suffering too, he said. Even though fashion companies might shift more sewing from China to those locations, they’re often still reliant on China for their materials.