Patchy demand at stores spells more pain for garment
suppliers
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[July 06, 2020] By
Sonya Dowsett and Ruma Paul
MADRID/DHAKA (Reuters) - Fashion brands and
retailers re-opening 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 the coronavirus at stores,
retailers are leaving buying decisions to the last minute and planning
on selling all-season basics such as men's chinos and t-shirts leftover
from spring through into fall.
"We don't think orders for clothing will pick up anytime soon. Shipments
could look up ahead of the Christmas but there is no guarantee," said
Siddiqur Rahman, a Bangladeshi garment supplier to H&M <HMb.ST> and GAP
Inc <GPS.N> among others.
The destructive weight of the COVID-19 pandemic is expected to contract
the $2.5 trillion global fashion industry by up to 30% in 2020,
according to investment bank Bryan, Garnier & Co.
![](http://archives.lincolndailynews.com/2020/Jul/06/images/ads/current/graue_sda_2016.png)
Nike <NKE.N> said it has already cancelled around 30% 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.
Tommy Hilfiger and Calvin Klein owner PVH <PVH.N> said last month it was
being very cautious on buying for fall as it reported a drop in
same-store sales of around a quarter for re-opened stores in North
America.
Ralph Lauren <RL.N> said it had cancelled around two-thirds of autumn
season orders, while Levi Strauss & Co <LEVI.N> has said it would carry
some unsold basic garments forward.
Stores have opened in most of the United States and Europe, and while
lines formed outside some, many consumers are staying at home, with
almost 60% in the United States surveyed by Coresight Research on June
24 saying they were avoiding malls.
A Morgan Stanley survey found that 57% of British consumers planned to
stay away from clothing stores for fear of catching the coronavirus. The
surge in online sales during the lockdown is not enough to compensate
for the slump in traffic.
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![](../images/070620PICS/busine31.jpg)
A shopper carries bags
at Bicester Village, amid the spread of the coronavirus disease
(COVID-19) in Bicester, Britain June 18, 2020. REUTERS/Eddie
Keogh/File Photo
![](http://archives.lincolndailynews.com/2020/Jul/06/images/ads/current/ccaonline_lda050208.png)
Cancelled orders result in less work for factories across Asia where
hundreds of thousands of garment workers have been laid off since the
pandemic struck.
New orders are down by as much as 45% on the year, said Rubana Huq,
president of the Bangladesh Garment Manufacturers and Exporters
Association, and factories in the world's second-largest garment maker
are operating at around half their capacity in the country.
With consumers wary of returning to stores, retailers are holding out to
the last moment to put in orders with suppliers as they try to gauge
demand at a time when traditional back-to-school spending plans are up
in the air.
"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 told Reuters, after the retailer reported its first
quarterly loss in decades last month.
Recruiters for garment companies in Vietnam, a major manufacturer for
big sportswear labels such as Nike and Adidas <ADSGn.DE>, are feeling
the pain.
One recruitment consultant, Will Tran, told Reuters that he and his
colleague had just two or two orders in April and May between them,
compared with the usual up to ten each.
"So 80 to 90% of job demand went poof," he said.
![](http://archives.lincolndailynews.com/2020/Jul/06/images/ads/current/cca_laptop-sda021709.png)
(Additional reporting by Nivedita Balu in Bengaluru and Anna Ringstrom
in Sweden; Writing by Sonya Dowsett; Editing by Louise Heavens)
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