Global Textile And Clothing Industry Under The Epidemic

The impact of the new coronavirus can be felt globally. Clothing and textile industries around the world are facing many challenges from procurement to retail, and this uncertainty is affecting enterprises.

Although the US China trade war has had a negative impact on China's textile and clothing industry, the threat of the latest coronavirus is causing more uncertainty in the supply chain. The unpredictability of the possible spread of this virus, coupled with the delay in production in some regions, has brought uncertainty to the manufacturing industry in all sectors of the world, which may hinder export growth and increase the uncertainty of US cotton exports in the first phase between China and the United States.

Demand for textile fiber drops

As the data of Wood Mackenzie Company shows, one impact of the virus outbreak may be the weakening of demand for polyester and other textile fibers, because business activities may be stagnant. Due to weak demand, producers, textile manufacturers and weavers are likely to return home, which may lead to further destabilization of the polyester chain. In addition to polyester, other related industries, such as xylene industry, may also be affected.

Global cotton consumption may decline by at least 500000 bales, leading to an increase in ending inventory and a decrease in US cotton exports, which may increase US cotton inventory by more than 1 million bales to 5.90-6 million bales. After the long-term decline of American cotton exports, China's cotton import demand has increased significantly in the past two years.

Brand closes store to prevent loss

In addition to textile manufacturers, many brands and fashion companies in China are also in jeopardy. Some brands that have closed their stores are Nike, Adidas and Capri Holdings, which owns Versace, Jimmy Chu and Michael Coles. These brands warn investors that if the virus continues to spread in China, sales will be hit. In order to prevent this, Cabry has closed about 150 stores in mainland China, while Nike has closed about half of its stores, and Adidas has also closed a large number of stores with Ralph Lauren and Tiffany.

Due to the epidemic, Levi Strauss closed about half of its stores in China and suffered from the recent financial shock. The outbreak of the virus also affected the evaluation of the world's major luxury goods groups. For example, Louis Vuitton and Kering lost about 5% and 6% of their shares. The epidemic also puts $149 billion worth of expenditures at risk.

With the increasing popularity, the Italian National Fashion Association announced its solidarity with China. In Milan Fashion Week, the Chamber of Commerce will launch a double event, including a special event and several video conferences. In the 2020/21 season, it will organize 56 runways for ready to wear clothing in autumn and winter. Fashion Week will open on February 18, when there will be a Chinese solidarity movement. The fashion hub market is a space dedicated to emerging creators, and its openness will become the background of the event.

Some Chinese designers headquartered in Italy and Europe usually show at Milan Fashion Week, and will not participate this time because of the delayed delivery from China.

At the same time, American activities suspended the NE material exhibition scheduled to be held in Boston on February 5 and 6, and the NW material exhibition scheduled to be held in Portland, Oregon, on February 12 and 13. The organizer of the Asia Pacific Leather Fair, headquartered in Hong Kong, said that they were considering postponing the event at the end of March. The main technology exhibition in Bangladesh, Dhaka International Garment Machinery Co., was also postponed.

The premiere of the visual sports exhibition in Portland will be held on February 12 and 13 as planned, but will not receive participants and partners from China.

Procurement delay

Global fashion companies are currently following the "waiting and watching" policy. However, some delays in orders are inevitable. At the same time, transferring orders to other countries is not a quick solution, because China is still the only largest supplier of textiles and clothing, and there is no substitute; Other garment exporting countries (especially Asian countries) rely heavily on textile materials such as yarns and fabrics from China; Many garment factories in Asia and Africa have management teams from China. Moreover, many countries in the world have imposed travel restrictions on Chinese tourists. In fact, the current situation may prompt more companies to find new procurement destinations. In addition, for global fashion brands and retailers, procurement costs may rise, because it needs more resources to transfer products and establish new supply chains.