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Clothing supply chains are unravelling fast as the fallout from the novel coronavirus (COVID-19) outbreak hits retailers and manufacturers across the world, writes GlobalData.

From initial concerns over the disruption to deliveries of clothing from China, where the outbreak began, the pandemic is now causing chaos throughout the entire supply chain.

Quarantined workers, travel restrictions and disruptions to the supply of raw materials such as yarns, fabrics, trims, packaging and labels – much of which come from China – are hurting manufacturers around the globe.

At the same time, retailers in North America and Europe are axing, slashing or postponing orders, as well as deferring payments, as country lockdowns reduce shopper footfall and stores are closed to try to slow the spread of the virus. Primark and Marks & Spencer, two of the UK’s largest clothing retailers, are struggling with unsold inventory and have in the last few days shaken the sector with massive order cuts and cancellations.

Leonie Barrie, Apparel Analyst at GlobalData, says: “The knock-on is being seen in factory closures and job losses for workers who are already amongst the most vulnerable due to low wages and poor labour laws and protections, with countries such as Vietnam, Cambodia, Bangladesh and Myanmar particularly hard-hit.

“The situation is unprecedented, and may well worsen before it starts to improve. Liquidity and cash flow are major problems in the clothing supply chain right now. Yet, there is the prospect of even more severe disruption and millions more job losses if factories don’t have the funds to survive until the end of the crisis.

“We’re in uncharted territory right now, so there’s no established set of best practices for brands to follow. So, while navigating their own challenges, they must continue to uphold responsible purchasing practices across their supply chains.”

Some, such as H&M Group and Zara-owner Inditex, are rising to the challenge by refocusing their supply networks and sourcing expertise on the production of much-needed medical face masks and other personal protective equipment (PPE) for hospitals and health care workers.

Barrie adds: “While many clothing brands and retailers are focusing on their own survival in these difficult times, they must also heed the financial strain on the factories and workers who produce their clothes. Collaboration, cooperation and strategic partnerships have been rallying calls across the industry in recent years, and they’re needed now more than ever before.”

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He points out how in the last few years, they have had some record-breaking brand associations for their movies. For example, they had 70 brand associations for Marvel’s Captain America: Civil War. Inspired by the film’s storyline, Jack & Jones created an exclusive collection featuring Iron Man and Captain America for fans to pick sides in the epic war between the Super Heroes and flaunt their loyalties. Another collaboration was with Hasbro, their global toys partner who came out with a wide range of action figures, play sets and role play items for fans to indulge in ‘Marvel’ous fun.

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The company expects its sales in FY18 to be 14.5 million pounds. Citing a report by Hardman & Co Research, Alli said the company has all the ingredients are in place and to exploit the opportunity, the company would need to raise a substantial amount of capital. Talking about the Indian e-commerce market, Alli said the market presents a huge opportunity for companies.

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