Coronavirus Amplifies the Need for a Diverse Fashion Supply Chain

Fashion brands and apparel retail have felt the immediate effects of the coronavirus (COVID-19) outbreak.

As the virus has leapfrogged from continent to continent, it’s caused temporary closures for brick-and-mortars in high-impact areas, as well as key closures for China-based fashion factories and fabric suppliers at the outbreak’s origin. While the fashion industry in China slows to an indeterminate holding pattern, many apparel brands have shifted their production into the neighboring territories of Bangladesh, and primarily Vietnam. However, the spread of travel restrictions has accompanied the spread of the coronavirus, so many brands that do not already have pre-existing relationships with non-China-based suppliers and production houses have had to cope with a decreased ability to vet their partners as closely and as in-depth as they may have normally preferred.

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In addition to the immediate scramble and pivot to production, major fashion brands across the product spectrum must also now anticipate the long-term impact of regular suppliers and stores shuttering for, in some cases, an entire quarter.

The Risk of Overly Homogenous Sourcing

Stock market impacts of the coronavirusThe coronavirus has caused luxury fashion brands to recalibrate and reforecast projected inventory and sales for the year to better reflect the production and buying downturn. Some have forecasted late product delivery as far out as the 2020 holiday season. This on top of the earlier Chinese trade war tariffs have put a strain on fashion brands seeking to grow their bottom line while maintaining relied upon ties with Chinese apparel and shoe sources.

In Europe, the coronavirus has made its way to Italy causing a Level 3 travel warning as of this article’s publication. However, Italian production has escaped much of the crisis, with only businesses in the far north of Italy being impacted to date. For shops throughout the rest of the country, things continue business as usual, with one caveat: even more production availability and capacity.

Italian Production Capacity Sees an Uptick

With major luxury fashion brands scaling down production requests and expectations, apparel, shoe, and accessories factories throughout Italy have seen a downturn in their own demand and in the demand on their Italy-based fabric and hardware suppliers. The large and small-batch production houses throughout mid- and southern-Italy, owned by third and fourth generation Italian artisans have seen a surge in production capacity that mirrors the downward spiral in the capacity of their Chinese counterparts.

Right now would appear to be an ideal time for U.S. and U.K. based fashion brands to contact Italian manufacturers that have been pre-vetted for quality and labor standards. Doing so would enable them to maintain on-quality and on-time product delivery with experienced and reliable factory partners, despite any travel restrictions.

Italian production has not yet been impacted by the coronavirus

Big Fashion Doing Its Part in the Coronavirus Crisis

Outside of apparel production, the COVID-19 pandemic has delayed, canceled, or decreased attendance at fashion shows and industry trade events from the U.S., to Paris, to Milan. Major brands with a significant stake in stemming the crisis have stepped up to the plate and pledged a cumulative billions to assist Chinese fashion partners. This will certainly help their fashion partners deal with the most critical economic impacts of the coronavirus. However, it will be quite some time until the Chinese market in particular returns to normal operative status.

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