London, United Kingdom – Fashion brands and retailers that have reopened around the world to patchy demand, stocking unsold inventory from spring, have cut fall orders by as much as two-thirds in movements that are more painful for Asian vendors.
With shoppers still wary of catching the corona virus in stores, retailers are leaving last minute shopping decisions and plan to sell basics for the entire season, such as men’s chinos and t-shirts that run from spring to autumn remain.
“We don’t think orders for clothing will be picked up quickly. Shipments can be looked up before Christmas, but there is no guarantee,” said Siddiqur Rahman, a Bangladeshi clothing supplier to H&M and GAP Inc., among others.
According to investment bank Bryan, Garnier & Co. The devastating weight of the Covid-19 pandemic in 2020 will shrink the global fashion industry by $ 2.5 trillion by up to 30 percent.
Nike said it has already canceled about 30 percent of its pre-pandemic factory orders before the fall and end of the holiday season, while Swedish H&M said it would sell some “less seasonal” spring stocks until the fall.
Tommy Hilfiger and Calvin Klein owner PVH said last month that it was very cautious about buying for the fall, as it reported a drop in same-store sales of about a quarter for reopened stores in North America.
Ralph Lauren said it had canceled about two-thirds of orders in the fall season, while Levi Strauss & Co. said it would bring some unsold basic garments.
Stores have opened in most of the United States and Europe, and while some lines have emerged, many consumers remain at home, with nearly 60 percent in the United States surveyed by Coresight Research on June 24 saying they shunned malls .
A Morgan Stanley survey found that 57 percent of UK consumers intended to stay away from clothing stores for fear of contracting the corona virus. The sharp increase in online sales during the lockdown is not enough to offset the decline in traffic.
Canceled orders result in less work for factories in Asia, where hundreds of thousands of garment workers have been fired since the pandemic hit.
New orders have fallen by as much as 45 percent over the year, said Rubana Huq, president of the Bangladesh Garment Manufacturers and Exporters Association, and factories in the world’s second largest apparel manufacturer have about half their capacity in the country .
As consumers are not wary of returning to stores, retailers are holding on to placing orders with suppliers as they try to gauge demand at a time when traditional school-to-school spending plans are in the air.
“We have to wait as long as possible to make purchases – to make decisions as close to the moment of sale as possible,” said H&M Chief Executive Helena Helmersson said Reuters, after the retailer reported its first quarterly loss in decades last month.
Recruiters for clothing companies in Vietnam, a major manufacturer of major sportswear labels like Nike and Adidas, are feeling the pain.
A recruiting consultant, Will Tran, told Reuters that he and his colleague had only two or two orders in April and May, compared to the usual up to ten each.
“So 80 to 90 percent of the demand for work went poof,” he said.
By Sonya Dowsett with additional reporting by Nivedita Balu and Anna Ringstrom; editorial: Louise Heavens