The Chinese New Year holiday, which fell on 25 January this year, is always a time of great migration across China as millions of workers go home to celebrate with their families. Brands plan for this period of closure, and the extended shutdown for many will be manageable, believes Joel Chadwick, managing director of Chadwick Textiles. “Speaking to all Chadwick’s key suppliers as well as seeking reassurance from our very own China office on the ground locally with its dedicated full-time team of six in the Fujian province (south-east China), things at least seems to have been impacted a lot less so far [than in Wuhan]. Fortunately, Chadwick’s annual pre-Chinese New Year planning means that stock levels and continuity are strong. If, like Chadwick, companies have prepared correctly since last year in advance of the holidays anyway, then it should be business as usual short term.” As Joel notes, “From a supply chain perspective, if you’re going to have an issue of this magnitude then the holiday period is the time to have it – that said, we wouldn’t wish this situation on our Chinese partners and friends under any circumstances.”
Joel doesn’t believe the coronavirus will affect the garment decoration industry greatly “as long as the problem is solved within the next two to three weeks”. Beyond that, however, and he warns that brands who don’t have adequate UK stock availability could start to be affected.
Result Clothing was also well prepared in the run up to the Chinese New Year, which has allowed it to be buffered from the effects of the outbreak; it is also not dependent solely on China for production. Director Sara Sanders-Smith told Images: “It’s very early days and we have yet to feel any effect. Our production is not based on a single source as we have offshore production spread globally. We also have superb stocks due to our highly efficient stock control and stock pile system already in place to cover for Chinese New Year, so we are confident stocks of key items will cover well into the next quarter.”
Leo Workwear issued a statement about the impact of the coronavirus today to say that the company is “assessing the potential interruptions to our supply and delivery of garments”. It reports that the Chinese government has told people to delay their return to work until 17 February, although Images has not been able to verify this date.
It added: “Although our factories have everything in place to resume production, there will undoubtedly be additional delays from component suppliers and transportation. We will keep you advised on any special production or stock delays.
“To mitigate our reliance on any single country we have, for a number of years now, dual-sourced product and we hope that the supplies from outside of China can proceed uninterrupted. We will be putting additional orders on these alternative sources to help maintain our supply lines.
“With over 900,000 garments in stock and plenty of containers scheduled to dock in the next 28 days we expect to maintain the levels that you are used to on our extensive range of products. Should any product line or size move into a ‘stock-out’ position, I am confident we will have another suitable garment for you meeting the required classification and standard.”
The potential impact on the global economy, not just in garments, is not worth thinking about if things get worse
Matt believes shipping delays and orders being stuck or stopped may occur in the next few weeks. “It’s so difficult to know where this will all go. Chinese factories were initially due to return to work this week, but with further delays we are going to see huge freight issues and in our own promotional products industry that could have a big impact. Where much of the product is for specific events or totally deadline driven, failure to meet those delivery dates could have disastrous consequences, resulting in redundant stock and cancelled orders.”
Joel Chadwick strikes a more upbeat note: “As one of our key suppliers told me this week, ‘Don’t worry, the Chinese government has the power and resource to get this under control, we are getting back to normal soon.'” The extended New Year holidays and the travel bans have helped containment, he says, and all factories have been issued with compulsory prevention measures by local provincial government officials, which suggests that it’s a case of ‘When will factories be reopened’, rather than ‘Will they be reopened?’.
“Producing sportswear and teamwear garments in other countries over and above China is always on our radar and some larger brands will have sources across Asia depending on the product, but China is an incomparable one-stop shop for the garment industry. The resources and service industries for garments is far more developed than in most other Asian countries put together so we must rely on the WHO and the Chinese government to solve the matter urgently. China is still the world’s factory – the potential impact on the global economy, not just in garments, is not worth thinking about if things get worse,” concludes Joel.
