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Chinese New Year to worsen stock delays

Fashion brands and independent retailers are braced for a difficult start to 2011 as an early Chinese New Year looks set to cause major delays for product delivery, compounding ongoing issues with a shortage of capacity at factories.

Spencer Fung, chief executive at supply chain specialist LF Europe, said 2010 had been the worst year “in living memory” for delivery delays, and that 2011 was likely to be “at least as bad”.

“The Chinese New Year shutdown happens every year but doesn’t usually present a problem of this magnitude,” he told Drapers.

China’s annual week-long holiday, which sees a complete shutdown of production, will start on February 3 next year, two weeks earlier than in 2010.

Grant Liddell, retail director at logistics company Uniserve, said this issue, combined with a later return to work in the UK, on January 4, meant a normal six weeks of production would have to fit into three weeks.

Many brands and retailers have been told their orders will not be fulfilled until after the Chinese holiday season, and some are paying deposits to reserve production capacity.

Matt Barker, creative director at young fashion brand Fever, did manage to place all his orders for spring 11 but said: “I have been told [by some suppliers] that I can’t get orders done by Chinese New Year and this is nine weeks before the shutdown.” Trimmings factories were among the worst affected, he added.

Philip Chaimo, owner and chief executive of women’s young fashion retailer Apricot, said it had shifted early season stock orders to Romania and India to spread the risk.

Liddell and Fung both added that production was slow to return to full capacity after Chinese New Year as migrant workers who travelled home for the celebration often failed to return to their factory jobs, causing a drop in headcount of about a third. They instead secured agricultural grants or alternative employment which allowed them to stay closer to home.

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