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Sourcing - How the pandemic is affecting global fashion supply chains
12 August 2020

The Corona pandemic has hit the apparel industry’s global supply chains hard. How are they recovering? What changes will the pandemic bring? Clothing manufacturers, sourcing platforms and buyers talk about their expectations for the future and whether they believe in the nearshoring trend.



Cancellations: premium manufacturers profit

In mid-March, when the lockdown was in full swing in Europe, Gerhard Flatz was able to reopen his textile factory KTC in southern China already. At KTC, which employs about 1,500 people, he produces highly technical clothing collections for international sports brands such as Mountain Force, Mammut, Helly Hansen or Rapha. The Corona crisis affected China first, as is well known, and hit KTC exactly at a time when the factory was taking two weeks off for the New Year in January.

Managing director Gerhard Flatz was in Europe at the time and had to remotely organise the factory’s forced closure. Returning was no longer possible. The factory was closed for four weeks altogether. In compliance with numerous hygiene requirements, it has been running normally since March. Did orders get cancelled? "There were cancellations, but only sporadic ones, especially with duplicate sizes. Warehoused goods have no chance in retail at the moment," says Gerhard Flatz. The premium strategy of his company pays off, says the native Austrian. "We make brand-shaping pieces, products that brands cannot do without."

Pandemic increases emigration from China

Not all garment factories in China are doing so well. "With the sharp drop in international orders, most Chinese apparel exporting companies have seen a significant decline in their workload, some companies have to reduce working hours, and some small and micro export companies are under enormous pressure to survive," said Chen Dapeng, executive vice president of the China National Garment Association, at the beginning of June. Although recent reports from China report an unexpectedly rapid recovery, it does not change the fact that the Chinese garment industry continues to shrink.

To read the rest of this comprehensive report by Regina Henkel, click on FashionUnited