About 40% of the clothes Americans wear come from China. And because of dislocations caused by the virus, retailers are looking elsewhere to fill the supply chain gap.
For a suit, the materials (the fabric, buttons and zippers) may come from China. It might then get sewn in Vietnam.
“But, if you don’t have fabric you can’t make a coat in Vietnam,” said Gary Adelman, CFO of Texas-based menswear company Trybus. Trybus clothing lines are sold at Nordstrom and Kohl’s.
Roughly 30% of the company’s supply comes from China — it uses factories in five countries. Trybus is looking at spreading the work around to rely less on China.
“I don’t think we’re at losing sleep level yet, but we’re definitely taking it very seriously,” Adelman said.
Sucharita Kodali, an analyst at Forrester, said most apparel companies aren’t in a state of emergency yet. They started moving business out of China a decade ago because of increasing costs and, in the last couple of years, because of the trade war. Those changes are paying off even more now that supply from China is at risk.
“The fact that these companies often do have diversified supply chains enables them to shift some of the production where possible,” Kodali said.
Asia has a hold on the apparel market, with Vietnam and Bangladesh coming in after China. And according to Julie Hughes, president of the U.S. Fashion Industry Association, more companies are moving production to Africa. What about American factories stepping in?
“You need to be able to move immediately for production. And we don’t have a lot of apparel production in the U.S. today,” Hughes said.
U.S. factories can’t compete with Asia’s quick churn. And, Hughes says, China is still the place to make complicated pieces like sweaters and difficult-to-make fabrics like cashmere and silk.
For Adelman, the production slowdown in China isn’t affecting what’s on shelves now, but what’s coming down the line a few months from now. The company’s fall 2020 collection could look a bit like fall 2019.
“Fashion is fickle. It’s hard,” he said.
Adelman says Trybus may have to reuse some of last year’s inventory and update it with different buttons or new trim.
COVID-19 Economy FAQs
What’s the latest on the extra COVID-19 unemployment benefits?
As of now, those $600-a-week payments will stop at the end of July. For many, unemployment payments have been a lifeline, but one that is about to end, if nothing changes. The debate over whether or not to extend these benefits continues among lawmakers.
With a spike in the number of COVID-19 cases, are restaurants and bars shutting back down?
The latest jobs report shows that 4.8 million Americans went back to work in June. More than 30% of those job gains were from bars and restaurants. But those industries are in trouble again. For example, because of the steep rise in COVID-19 cases in Texas, Gov. Greg Abbott, a Republican, increased restrictions on restaurant capacities and closed bars. It’s created a logistical nightmare.
Which businesses got Paycheck Protection Program loans?
The numbers are in — well, at least in part. The federal government has released the names of companies that received loans of $150,000 or more through the Paycheck Protection Program.
Some of the companies people are surprised got loans include Kanye West’s fashion line, Yeezy, TGI Fridays and P.F. Chang’s. The companies you might not recognize, particularly some smaller businesses, were able to hire back staff or partially reopen thanks to the loans.
You can find answers to more questions on unemployment benefits and COVID-19 here.
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