On April 24, according to the “Nikkei Chinese Network” report: Vietnam’s orders are facing a sharp decrease.
Vietnam’s largest state-owned group (Vinatex) discusses temporarily furloughing up to 50,000 employees. For small and medium-sized factories, they may face a business crisis. If the “evaporation” of business becomes long-term, not only Vietnam’s economy, which continues to grow rapidly, will usher in an inflection point, but global apparel companies such as Spain’s “ZARA” may also face the risk of the foundation of the supply chain collapsing.
“If this continues, 30% to 50% of employees’ jobs will disappear by May.” Li Jinchang, Vinatex’s chief executive officer (CEO), revealed a sense of crisis in his words. .
Vinatex is the largest company with approximately 10% share of Vietnam’s garment sewing production market. It is a state-owned enterprise, and Itochu Corporation also invests 15% in the enterprise. In addition to “ZARA” operated by Inditex Group, it also conducts transactions with Swedish clothing company Haynes Morris Clothing (H&M) and others. Vinatex has 200 factories in Vietnam and the number of employees in the group reaches 100,000.
Data show that from April to May this year, footwear product orders are expected to drop by at least 70% compared to the same period last year. According to Vinatex, even if the epidemic subsides before May, the company’s losses will be close to 1 trillion Vietnamese dong (approximately RMB 310 million), which is 200% of last year’s net profit.
Take the well-known enterprise “Nike” as an example. After Nike transferred its production line to Vietnam, instead of enjoying the processing dividends of Vietnam, it planned to invest US$80 million to establish contract factories in Indonesia and Cambodia. 120 production lines to reduce dependence on the Vietnamese market.
Image source: Jin Shi Data
In Vietnam, Hanoi City and other places also prohibit non-emergency non-emergency services. Necessary travel, but does not require the factory to stop production. Although the factory can operate, there are no orders. In order to tide over the crisis, factories used sewing equipment to produce masks, but it was only a drop in the bucket.
Vinatex has 200 factories in Vietnam and the number of employees in the group reaches 100,000.
Vietnam is anxious
It wants to implement the Vietnam-EU Free Trade Agreement as soon as possible 》Implementation
On April 23, according to Vietnam News Agency:
The Standing Committee of the Foreign Affairs Committee of the National Assembly of Vietnam on April 21 A meeting was held in Hanoi to conduct a preliminary review on the approval of the Vietnam-EU Free Trade Agreement and the Vietnam-EU Investment Protection Agreement.
The Ministry of Industry and Trade of Vietnam is stepping up its efforts to implement a number of measures to implement the Vietnam-EU Free Trade Agreement, help companies find markets, expand production and operations, and promote Vietnam-EU trade exchanges. In order to effectively implement and seize the opportunities brought by the Vietnam-EU Free Trade Agreement, the Ministry of Industry and Trade has determined three major tasks, namely: formulating laws, formulating action plans and increasing publicity efforts.
Liang Huangtai said: “The content of the agreement has been publicly announced, so companies can understand it in advance. Because of this, they can grasp its benefits after the agreement takes effect.”
Nguyen Thu Trong, director of the WTO and Integration Center of the Vietnam Chamber of Commerce and Industry, said that it would be huge if the origin regulations for Vietnam’s exports to the EU are synchronized with the Vietnam-EU Free Trade Agreement. effort. Ruan Qiuzhuang said that the EU’s regulations on the origin of goods exported to Vietnam are also very important.
She said: “This is a huge benefit for enterprises, especially for enterprises that import machinery and equipment from the EU. In addition, enterprises must understand and grasp the regulations of origin, and meet their requirements.”
On April 24, American clothing giant Gap said that due to the forced closure of its stores during the COVID-19 epidemic, it was burning cash at an alarming rate. It has burned through $1 billion since February and is expected to have only $750 million left in its bank account by next week. The company said the future will be uncertain if it cannot secure funding to help it maintain operations.
On clearance from 25% off!
Gap will stop paying wages to 80,000 employees
On April 27, according to fashion business reports:
Gap is currently taking measures to preserve cash, including temporarily closing all North American stores, placing approximately 80,000 store employees on unpaid leave, and cutting executive compensation.
The group has stopped paying rent for April at 2,785 North American stores, totaling US$155 million. The group said it is negotiating with landlords to discuss deferring payments and changing lease agreements, or permanently closing some stores.
Previous store poster
In order to maintain basic operations as much as possible, Gap Group has withdrawn its full-year guidance, suspended dividends, and may lay off employees and seek loans in the future. Gap’s US official website is conducting sales promotions with up to 25% off, and its Chinese official website is also selling new summer products at 50% off.
Adidas suffered a heavy blow
Net profit fell 96%
On April 27, Adidas released this year’s Q1 financial report, showing the impact of the global epidemic on fast-moving clothing.
Adidas disclosed in its financial report that the company’s revenue in the first quarter was 47.5%.��€, down 19% year-on-year;
Net profit was only 20 million euros, down 96% year-on-year.
Adidas expects revenue in Greater China to decrease by 800 million to 1 billion euros in the first quarter of 2020
The company also stated that due to the uncertainties caused by the epidemic, the company is currently unable to provide full-year revenue guidance. Although the e-commerce platform achieved 35% performance growth in the first quarter, it is obviously unable to make up for the huge performance losses.
The company also predicts that the company’s revenue in the second quarter of 2020 will face a 40% year-on-year drop.
Gloomy forecast:
Global economic plunge
Economic activity will remain sluggish until the end of 2021
According to Reuters reports in the past two days:
“The global economy is plummeting at the fastest pace since World War II.”
Michael Hanson, senior global economic analyst at JPMorgan Chase, pointed out. He also said that unprecedented policy support means that the global economy will begin to rebound faster than in a typical recession, but economic activity will remain sluggish until the end of 2021.
In multiple Reuters surveys over the past two months, economic analysts who are usually more optimistic about the economic environment have turned extremely cautious, with more and more people lowering their forecasts multiple times. The forecasts for developed and emerging economies are already quite bleak.
On April 25, the U.S. Congressional Budget Office (CBO) predicted that the shutdown of business activities caused by the coronavirus epidemic would lead to the most severe decline in the U.S. economy. , and pushed the U.S. budget deficit to its highest level since the 1940s.
The nonpartisan research organization said on Friday that the U.S. economy may shrink by 12% in the second quarter, and if the shutdown caused by the epidemic lasts for a year, the decline will reach 40%, on average The unemployment rate will reach 14%. The number of unemployed people in the second and third quarters will reach 27 million.
CBO said the federal budget deficit is expected to reach $3.7 trillion when the fiscal year ends on September 30, up from about $10,000 in the 12 months through March. One hundred million U.S. dollars. The U.S. Congress has approved an unprecedented deficit spending plan to alleviate the impact of a large-scale shutdown of the U.S. economy. </p
