Fashion retailers are becoming increasingly concerned about the impact of the Covid-19 coronavirus on stock for autumn 20 and the longer-term effects that could be felt for the next “six to 12 months”.
Many high street fashion brands have managed to avoid immediate stock issues through pre-emptive large orders made ahead of the annual factory shutdowns over Chinese New Year (25 January to 8 February). However, as the virus continues to spread, autumn 20 is now becoming a concern, retailers have told Drapers.
“The challenge looking forward is that significant elements of our autumn collections would typically be sourced from China, such as coats, for which deliveries would be August onwards,” the chief executive of one brand said. “As such, the impact on our industry becomes significant after the summer – either one looks to build sourcing for these areas (at a cost) in Europe, or one loses large elements of the range. We are definitely concerned about where this goes, and not just at a human level.”
The head of wholesale at one international brand told Drapers they were expecting delivery delays of one to three months: “Factories in China are only just starting to come back to work which is about one month later than expected. However, it’s not just about the factories opening up, they need workers to return from their home provinces and material suppliers like box suppliers, leather suppliers, heel suppliers are only just returning. Basically, deliveries are going to be one to three months later than planned.”
He added that the effects of coronavirus are likely to be felt “for the next six to 12 months”: “Airfreight will become more expensive as companies try to fly in their goods, driving up transportation costs and companies will try to source from other regions which will put pressure on new markets to deliver goods on time. Stock already delivered into the market now becomes more valuable.”
Steven Cook, Debenhams’ managing director of fashion and home, told Drapers the department store was working to get ahead on autumn stock with its Chinese sources now back online: “All of our sources are now back to work, with 100% of the management and about 70% of workers. That’s a big uplift from last week and they are accepting all of our development so we don’t have any issue from that perspective, but I would imagine the re-start up is what’s going to create some of the issues.
“The development of autumn winter is for us what we all have to be very ahead of and we’re instructing our teams to move quicker on getting development out there. China represents around 21% of our overarching sourcing but obviously represents a greater component influx into other markets. We’re substantially shipped for the [spring] season so on what’s remaining we have very minor one to three-week delays.”
The managing director of one brand with a factory in Asia said: “I am concerned about spring 20 but, more importantly, autumn 20. We have delays on a few things [for spring 20] but generally, that looks to be OK at the moment. I have not heard anything about autumn 20 as yet, but I would not be surprised to see a major impact somehow.
“You cannot close China and expect there to be no knock-on effect. We just have to work to minimise the effect to our customers.”