In the last couple of months, there have been a lot of discussions on the impact of coronavirus on retailers, brands, manufacturers and sourcing destinations, but in the whole process, the independent buying entities that deal with a range of diverse clientele from across the globe were somewhat missing. It is but sure that if manufacturers and exporters had to count huge losses due to order cancellations by brands, the buying houses would not be much better… or are they?
To know how businesses in the last few months have been and what they think would be the immediate future post the pandemic, Apparel Resources spoke to some buying houses to get to the bottom of things.
“We did have cancellations, but most of these were on purchase orders recently placed where we had not initiated any fabrics/trims, so we did not have any liability. Some made up orders and ones in production were held up, but we have been asked to ship these the next season, so we are sitting on some inventory but hoping to clear them in a couple of months. Also, quite a few orders have been pushed back impacting our first quarter but our second quarter is padded mainly for this shift in business,” shared Rajnish Kapoor, Director, Krayons Sourcing Limited.
With its presence in India, Bangladesh and China, Krayons boasts of a wide range of clientele across geographical locations and markets. Truworths, Foschini Group, Woolworths, etc. (from South Africa), Reliance Trends, Westside, Woodland, etc. (from India), Walmart, Calvin Klein Sam’s Club, Costco Wholesale, English Laundry, Weather Proof, Hunkemoller, etc. (from the USA and Europe) and David Jones, Speciality Fashion Group, Lowes, etc. (from Australia) are some of the names that it caters to in a wide ranging product categories – kidswear, womenswear, menswear and home furnishing.
However, the saving grace for Krayons was that factories have been supportive, which helped it manage to scrape past with no major liability. “Supplier factories have also managed to come around accepting pushbacks and a few held up orders,” explains Rajnish underlining how this mutual support has been a boon for both the parties during the COVID-19 crisis period.
“Goods being produced are not being shipped. The last containers were moved towards the latter half of February, but nothing after that as international borders remain sealed. The deliveries that were to take place in April were moved to May, and now we are not very sure if the buyers will accept the shipments, as the selling season will be over by then,” Himanshu Ahuja, Director, Cotton to Catwalk Limited, expressed apprehensions.
Cotton to Catwalk does not expect any live purchase orders from its clients in Canada market, as the orders would now be moved to the next season. However, with the season being the opposite of Canada, purchase orders have started coming in from South American customers. Despite the somewhat better prospects in days to come, business has been bad in the last couple of months. “By June last year, we made a booking of about 0.5 million pieces which we shipped subsequently. However, this May there is not even a single order or even shipments,” Himanshu added.
Mamunur Rashid Johny, COO (Buying Division) of Euro Bangla Group, commented “Orders were cancelled due to the pandemic, and the volume of cancelled orders is quite substantial, I must tell you, and it had a huge impact on us for sure.” This setback has forced Euro Bangla Group to initiate several steps to cut cost in all possible ways to remain relevant.
Though not very sure as new orders are subject to when and how the buyers in Europe and the USA can come out of the lockdown, Mamunur is hoping that from June-July onwards, orders might just start trickling in.
Rajnish, though, is not very hopeful of any decent business in the coming days, as he feels that in the next 12 to 18 months, there will be a lot more retailers closing shops and the overall retail pie will go down drastically. Also, the situation will never get back to ‘normal’ and as and when trade opens, there will be the ‘new normal’, which will pose a lot more challenge than ever, Rajnish felt.
“Honestly, there will be no gain for Bangladesh; even if we are able to clock 70 per cent of our last year’s revenue sales, we should feel encouraged. There is so much uncertainty with this virus situation and with a lot of well-known retailers going out of business, there is much to lose than gain,” underlined the Director of Krayons Sourcing Limited.
“This year, Spring/Summer is more or less done, as there are a lot of stocks that have piled up at customers’ end, which may even go up till the next summer,” said Rajnish, adding, “Autumn/Winter may see business picking up a bit, but again will not be on the lines of last year.”
“Things will not improve till the time we have a vaccine in place and consumers’ confidence is back as was in 2019,” concluded Rajnish.