Weak Market, Lack Of Consumer Confidence, Fashion Brand Orders Continue To Shrink

Fashion brand stores around the world are reopening, but retailers have cut autumn orders by two-thirds as consumer demand remains volatile and unsold spring stocks remain to be cleared, which has hit Asian suppliers.

Consumers are still worried that they will be infected with the new coronavirus in their stores, so retailers have repeatedly postponed their new purchase decisions and planned to mainly sell all the basic items left over from spring to autumn, such as men's denim trousers and T-shirts.

"We don't think garment orders will increase in the short term. Shipments may rise before Christmas, but there is no guarantee, "said siddiqur Rahman, a clothing supplier for H & M and gap in Bangladesh.

According to Bryan Garnier & Co., an investment bank, the epidemic is expected to shrink the $2.5 trillion global fashion industry by 30% in 2020.

Sportswear brand Nike said it had cancelled about 30% of its factory orders before the fall and end of the year holidays, while fast fashion brand H & M said it would sell some "less seasonal" spring stocks until autumn.

PVH group, the parent company of Tommy Hilfiger and Calvin Klein, said last month that it was very cautious about autumn purchases as same store sales fell by about a quarter after the group's North American stores reopened. Ralph Lauren has also cancelled about two-thirds of its autumn orders, while Levi Strauss & Co. will continue to sell some of the basic items in stock.

At present, stores in the United States and most parts of Europe have opened. Although there are long lines outside some stores, many consumers still stay at home. Nearly 60 percent of U.S. consumers said they would avoid shopping malls, according to a survey conducted by coresight research on June 24.

A Morgan Stanley survey found that 57% of British consumers do not plan to go shopping in clothing stores to prevent themselves from contracting the new coronavirus. The surge in online sales during the quarantine period was not enough to make up for the decline in brand store traffic.

The cancellation of the order will reduce the workload of Asian factories. Since the outbreak, thousands of uniformed workers have been laid off.

Rubana Huq, President of the Bangladesh garment manufacturers and Exporters Association, said new orders fell by as much as 45 per cent year-on-year. As the world's second-largest clothing manufacturer, the industry accounts for about half of the country's total capacity.

As consumers remain cautious about returning to stores, retailers are insisting on placing orders with suppliers at the last minute in an attempt to assess demand while traditional delivery plans are in the air.

"We need to wait as long as possible on the procurement side to make a decision near the launch of the sale," H & M chief executive Helena helmersson told Reuters The retailer reported its first loss in decades in the quarter.

Recruitment has also been affected by Vietnam's clothing companies, which have long been major manufacturers of large sportswear brands such as Nike and Adidas.

Will tran, a recruitment consultant, also told Reuters that he and his colleagues received only two sporadic orders in April and may, compared with two or two orders between April and may, and usually as many as 10 orders a month. "You can see that 80 to 90 percent of the job demand is gone," he said.