Bangladesh garment sector hit
FASHION brands and retailers reopening around the world to patchy demand, and carrying unsold stock from spring, have cut fall orders by as much as two-thirds in moves spelling more pain for Asian suppliers.
With shoppers still wary of catching coronavirus at stores, retailers are leaving buying decisions to the last minute. They are planning on selling all-season basics such as men’s chinos and t-shirts leftover from spring into autumn.
“We don’t think orders for clothing will pick up anytime soon. Shipments could look up ahead of Christmas, but there is no guarantee,” said Siddiqur Rahman, a Bangladeshi garment supplier to H&M and GAP Inc among others.
The destructive weight of the pandemic is expected to contract the $2.5 trillion (£2tr) global fashion industry by up to 30 per cent in 2020, according to investment bank Bryan, Garnier & Co.
Nike said it has already cancelled around 30 per cent of its pre-pandemic factory orders for the autumn and end-of-year holiday season, while Sweden’s H&M said it would sell some “less seasonal” spring stock through into autumn.
Stores have opened in most of the US and Europe, and while lines formed outside some, many consumers are staying at home.
A Morgan Stanley survey found that 57 per cent of British consumers planned to stay away from clothing stores for fear of catching coronavirus. The surge in online sales during the lockdown is not enough to compensate for the slump in traffic.
Cancelled orders have resulted in less work for factories across Asia, where thousands of garment workers have been laid off since the pandemic struck.
New orders are down by as much as 45 per cent on the year, said Rubana Huq, president of the Bangladesh Garment Manufacturers and Exporters Association. Factories in the world’s second-largest garment maker are operating at about half their capacity in the country, Huq added.
With consumers wary of returning to stores, retailers are waiting until the last moment to put in orders with suppliers as they try to gauge demand.
“We need to wait as long as we can with purchases – to take the decisions as near the sales moment as possible,” H&M chief executive Helena Helmersson said, after the retailer reported its first quarterly loss in decades last month.
Tommy Hilfiger and Calvin Klein owner PVH said last month it was being cautious on buying for fall as it reported a drop in same-store sales of around a quarter for reopened stores in North America.
Ralph Lauren said it had cancelled around two-thirds of autumn season orders, while Levi Strauss & Co said it would carry unsold basic garments forward.