According to Reuters, clothing retailers in Europe and the United States are sitting on excess inventory and are cutting spring orders. Purchasing agents are facing delayed payments and garment factories in Bangladesh are halting production.
The global apparel industry has faltered in a difficult 2020, with a new round of COVID-19 lockdowns and uneven national vaccine rollouts dashing hopes of recovery. Some major retailers are still grappling with last year’s clothes, which normally sell out during their usual clearance sales. British chain Primark told Reuters that the company’s spring and summer inventory in 2020 was worth approximately 150 million pounds (approximately 1.33 billion yuan), and its autumn and winter inventory was 200 million pounds (approximately 1.772 billion yuan).
To give an idea of the scale of the backlog, consulting firm McKinsey said the value of unsold clothing in stores and warehouses globally was between 140 billion and 160 billion euros (about 1.24 trillion euros). yuan to 1.41 trillion yuan), more than twice the normal level. Britain’s Marks & Spencer and Germany’s Hugo Boss said they had fewer orders for this year’s spring collections than in previous years.
Ron Frasch, former president of Saks Fifth Avenue, said retailers are keeping sales smaller and tighter delivery times. He is now an operating partner at private equity firm Castanea Partners, which works with many apparel brands. Frasch said: “Most brands’ shipments are very tight right now, and agents are also very nervous. I think everyone is purchasing very conservatively. I know a lot of people are delayed in paying. That’s for sure.”
Hong Kong-based purchasing agency Li & Fung told Reuters that some retailers had asked for payment delays but declined to provide details. Li & Fung manages more than 10,000 factories in 50 countries for retailers including global retailers.
As a result, the pain flows to major garment manufacturing hubs such as Bangladesh, whose economies depend on textile exports. Factories are struggling to stay afloat.
The 50 factories surveyed by the Bangladesh Garment Manufacturers and Exporters Association said that due to the pre-Christmas lockdown in much of Europe and another lockdown in January, the impact on them business has been hit hard, with orders they received this quarter falling by 30% compared to previous years. “Orders usually arrive three months in advance. But there were no orders in March,” said Shahidullah Azim, a factory owner in Dhaka, the capital of Bangladesh, whose customers include North American and European retailers.
He said: “We are running at 25% capacity. I have some orders that will keep the factory running until February. After that, I don’t know what our future will be. How. It’s hard to say how we will survive.”
Miran Ali, a representative of Star Network, an alliance of manufacturers in six Asian countries, owns four factories in Bangladesh and is also facing Similar questions. Miran Ali told Reuters reporters in the capital Dhaka: “At this point in time, our production orders should be completely full until at least March, and orders for autumn and winter have also begun. But now looking at the overall situation, this is It’s very slow.”
Asif Ashraf, the owner of another factory in Dhaka that produces clothing for global retailers, said the adjustment has been difficult. “We have produced the fabric and we are ready to sew the garments, but they said the order has been put on hold.” Parker Lane Group, a textile recycling company, told Reuters that due to store closures Likely continuing into the summer, some retailers are trying to sell off as much excess inventory as possible before placing new orders. One CEO, Raffy Kassadjian, said his business went from handling an average of 1.5 million pieces of excess clothing per month to more than 4 million in January, its busiest month ever.
According to data from Euromonitor, the apparel industry was in a severe situation last year, with sales falling by about 17% compared with 2019. The future is uncertain. Estimates for 2021 range from McKinsey’s pessimistic forecast of a 15% sales drop to Euromonitor’s 11% recovery.
So are there any highlights? The lockdown pajamas craze is providing some small relief. Marks & Spencer CEO Steve Rowe said: “If you want to know what the great British public are doing – they’re wearing their pajamas again.” And Hugo Boss hinted at the same phenomenon, saying the company had “streamlined Our classic business wear collection has been expanded to include casual wear.”
But for some factory owners, this is little comfort. Ali Ali from Dhaka admitted: “The demand for pajamas is unprecedentedly high. But not everyone can make pajamas!”</p
