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The Impact of the COVID-19 on the Apparel Industry

Coronavirus

The COVID-19 is without a doubt the worst crisis since the world has known for the past 100 years. The handmade leather crafts /clothing/textile industry is at the front line, and the demand for goods is rapidly decreasing over time. For instance, in April, the market had 31% of global orders canceled on average, according to the ITMF, The International Textile Manufacturers Federation (reported by Just-Style). This is the biggest demand shock in the industry with an uncertain impact on the long term according to they reported. Turnovers are also expecting to be significantly lower, at around a 29% decrease in the industry. A report from the International Labour Organization is forecasting a potential 50 percent drop in sales for 2020, just in the European Union.

According to the same report, the biggest worldwide textile and leather players have also been severely impacted by the pandemic:
Adidas sales in China fell by 80 percent between January and February 2020, Ralph Lauren warned that global sales could drop by
as much as US$ 70 million; Gap expects to experience a first-quarter global sales hit of around US$ 100 million; and Inditex has closed 3,785 stores in 39 markets – over 50 percent of its stores – with a combined store and online sales falling by 24.1 percent in the first half of
March 2020
‘.

The impacts are also seen on the production side of businesses. Major producing and manufacturing regions in South-East Asia and more specifically China, for instance, are suffering from a shortage of raw materials, causing disruptions and slow down among the biggest players as well: ‘while garment factories are slowly resuming operations, companies are facing challenges to ramping up production, such as higher costs and continuing shortfalls of raw materials.‘ according to the ILO.

Lastly, the impacts on the consumers are clear: massive unemployment waves striking the different regions of the world is unlikely to bring consumption at higher levels.

On the other hand, it seems that the biggest players are focusing on fighting the crisis, for now. According to the Industrial Fabrics Association, an alliance of famous American clothing brands and material organizations, reacting to the call of the White House for clinical supplies, has set up an assembly line to support emergency clinics, social insurance laborers and citizens engaging the spread of the COVID-19 pandemic. Parkdale Inc., Hanesbrands, American Giant, Los Angeles Apparel, AST Sportswear, Sanmar, America Knits, Beverly Knits, and Riegel Linen are part of the coalition to help to fight the virus spread.

Kaillou is doing its best to keep providing its consumers with the best experience and delivery time. We have suffered some raw material shortage/suppliers delay as well, but the industry is slowly recovering. We estimate delays to be at 3/4 days for each order, but all our products are available and ready to be shipped within Hong Kong and SEA.

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