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Brands share supply chain & trading concerns

From Lululemon to Adidas and Primark, brands are preparing for the worst as coronavirus spreads. Lululemon, for example, has closed most of its 38 stores in China with others operating on reduced hours. Luxury brands like Burberry and Michael Kors are also seeing their sales in China plummet as consumers there are tending not  to shop for anything other than day to day necessities.  Brands like Adidas, Nike and Puma have also closed stores in China and have seen sales in the country fall by as much as 80 per cent in the past month. These sports shoe brands also manufacture significant volumes of their products in China . Apple has closed all of its 42 stores in China. Similarly, with travel to and from China restricted, luxury retailers around the world which have long attracted tour parties from China, are suffering a major fall in sales that sees no imminent end. 

On the supply chain front, Primark has warned of stock shortages if there is much further disruption to manufacturing in China. Whilst Primark has sufficient stock for the next few months, it, like many others, is now considering whether it should  increase production in other countries to reduce its exposure. 

With daily news coverage of the spread of coronavirus in regions as far flung as Australia and Italy, the impact on consumer spending and travel is expected to deepen according to economists and may well force some markets into recession. 

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