Talking strategy: COVID-19 is leading to fissures in apparel supply chain relationships

8 pages, published in Issue 46, July 2020   Report price: Euro 305.00; US$ 400.00

The COVID-19 pandemic has had an unprecedented impact on the world's economies and led to fissures in apparel supply chain relationships which will take years to heal. Several Western apparel retailers have been forced to take drastic measures, and cuts in store numbers and jobs have been announced by UK-based Arcadia Group, Burberry, Harrods, John Lewis, Marks & Spencer (M&S) and Ted Baker. Meanwhile, in the USA, JCPenney, PVH and Recreational Equipment Inc (REI) have announced significant job cuts, and Brooks Brothers has filed for protection from its creditors under Chapter 11 of the US Bankruptcy Code. Less widely publicised is the plight of suppliers suffering from cancellations of orders by major Western brands and retailers. Many are unable to resell the goods they have made because the same brands and retailers insist that they remove and replace accessories such as buttons rivets and zippers, which would make the goods unsaleable. On the other side of the coin, failure by suppliers to protect their workers during the pandemic has tarnished the reputation of the online retailer Boohoo as a UK-based supplier which the company was using has been accused of forcing employees with COVID-19 to come into work. In response, high-profile companies such as Asos, Next and Zalando have stopped selling Boohoo goods. In this report, Robin Anson analyses the effect of the COVID-19 pandemic on the retail landscapes in the UK and the USA with particular reference to major fashion brands in these markets. Also, he discusses the effect of the pandemic on suppliers to major fashion brands, and highlights ways in which supply chain risks can be minimised.

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