The fast pace at which the deadly COVID-19 is spreading its horror across the globe is impacting businesses drastically. Fashion retailers, in particular, are facing the heat of coronavirus outbreak with end customers, especially across Europe and the USA, preferring to stay put at home amidst lockdowns.
The consequence – sales are on a downward curve.
The ripple effect, down the supply chain, garment manufacturers are counting losses! Order cancellations, downsizing work orders and holding back shipments have now become the order of the day. Expectedly so, Bangladesh’s apparel exporters are apprehending that the worst is perhaps yet to come.
First Europe; as Governments across the continents are increasingly shutting down high streets to minimise the spread of coronavirus, fashion retailers are at their wits’ end. Nike (NKE), Urban Outfitters (URBN), Abercrombie & Fitch (ANF) and more shuttered many or all of their retail stores around the globe through late March because of coronavirus. They followed makeup brand Glossier and outdoor brand Patagonia, which were among the first consumer goods retailers to announce temporary store closures.
The scene is no different in the USA. As per reports, Nike declared all stores in the United States, Canada, Western Europe, Australia and New Zealand closed effective March 16, followed by Abercrombie & Fitch, Lululemon and many others. Lands’ End Inc and Columbia Sportswear Co. made it public that they would temporarily shut all of their stores in the US and North America respectively while Gap Inc has temporarily reduced store hours for all of its locations in the US and Canada, and closed over 100 stores.
These moves by the major apparel retailers have landed Bangladeshi garment exporters in a fix. The exporters also fear that even if online sales continue, consumers would have little appetite for new clothes as storing food and other necessary items are more important in case of a lockdown than buying clothes.
Many US cities including New York and Los Angeles have already enforced a complete lockdown to limit the spread of the epidemic. Earlier, Italy, Spain and France declared nationwide lockdown, as the countries took sweeping measures to reduce the spread of coronavirus.
The garment exporters have had to handle the fallout of the store closure in Europe as many retailers including Primark, Inditex, and others reportedly asked suppliers in Bangladesh to hold shipments.
As per the country’s apex body of garment exporters – the Bangladesh Garment Manufacturers and Exporters Association (BGMEA), buyers have intimated the traders’ body of downsizing their existing export orders by 15-30 per cent.
“Some buyers are requesting to make air shipment of export products while others are seeking discount on prices. They are arguing that demand for readymade garment products are declining as many brand shops in the countries affected by coronavirus have been shut down as a measure to contain the infection,” stated BGMEA President Dr Rubana Huq while highlighting the impact of store closure in Europe on the garment makers in Bangladesh.
Earlier, Commerce Minister Tipu Munshi also underlined that amid falling sales due to rapid spread of the dreaded virus globally, some European retailers, especially those based in Italy (the worst affected in Europe by coronavirus), are mulling cancelling or deferring work orders from Bangladesh. Now with the large-scale store closures in the USA as well, the garment exporters are even more worried.
“There will certainly be impacts on our business, but we do not know the actual extent of the damage as the outbreak of coronavirus is still going on. It is like a fire and one can only say about the damage after it is doused,” maintained Anwar-ul-Alam Chowdhury Parvez, President of the Bangladesh Chamber of Industries.
Meanwhile, another prominent apparel exporter on his part averred, “Now we are in fear of further hit in export from the US as retailers there started closing down their stores in the market. If the US retailers start putting shipment on hold and cut quantity or cancel orders, the operations of factories may be halted.”
With Europe and the USA accounting for bulk of apparel exports from Bangladesh, such large-scale store closures is an ominous sign for the Bangladesh garment industry, felt many within the industry.
“Coronavirus clearly presents a significant threat to the industry as a whole. It may face disastrous situation very soon if the pandemic prolongs. Most European cities have already gone into lockdown, while the USA has declared a state of emergency restricting movements of people. Brands and retailers are, thus, closing stores and prevent losses,” underlined Mohammad Hatem, former Vice-President of Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA).