Business

Why aren't spring and summer fashions on store shelves? Blame coronavirus

Many retailers depend on clothing made in China

Manager Kara Rayner-Schares shows a puffer sleeve dress to a customer at Catherine's Boutique, 7 S. Dubuque St., in Iowa
Manager Kara Rayner-Schares shows a puffer sleeve dress to a customer at Catherine’s Boutique, 7 S. Dubuque St., in Iowa City, Iowa, on Wednesday, June 17, 2020. (Jim Slosiarek/The Gazette)
/

As shoppers begin to set foot in Corridor apparel stores large and small, looking for the latest in spring or summer clothing, they might notice many of the shelves and racks filled not with bright prints but with much of the same winter merchandise that was on display this past March.

“We place orders in September for February, March and April,” explained Catherine Champion, owner of Catherine’s Boutique, with stores in Iowa City and the Quad Cities.

“The vendors take pre-orders and then they produce. Most of the vendors have pushed out the next season to August. We placed our orders for fall clothing in February. Anything that was not in production has been edited” — that is, some quantities have been reduced.

“While we would normally receive fall apparel in July and sell it, we are not going to receive it until August,” Champion said.

So now clothing suppliers are working to reduce excess inventory because stores have lost 90 days of sales.

“Ninety days is a season,” said Champion, who has decades of experience in the retail apparel business including working at Marshall Field’s in Chicago. “We have had nothing like this.”

China, where the coronavirus is believed to have originated, is a major source of clothing and footwear for the world. As factories shut down there and in Bangladesh, a secondary but still major source of apparel, supply chains were severely disrupted.

ARTICLE CONTINUES BELOW ADVERTISEMENT

The impact has been felt across all industries, but particularly the fashion industry. Brands and retailers supplied by factories in China include Nike (at 23 percent), Gap (21 percent), Kohl’s, Calvin Klein, Tommy Hilfiger and American Eagle (20 percent), Urban Outfitters (15 percent), Lululemon (6 percent), Dollar General (5 percent to 6 percent) and Nordstrom (3 percent).

As the apparel industry works to recover, Champion expects needed changes to occur in the area of global supply lead time, from development to final delivery of product to retailers.

“It has forced people to make decisions that they have been toying with for years.” she said. “Should we show in season? Should we try to produce in season and have shorter lead times so we are not all left holding the bag?

“A lot can happen in six months” — the typical, current lead time in the apparel industry.

Champion said shortening lead times may involve moving some apparel production from Bangladesh, China or Vietnam to the United States, but that likely would increase the cost of the finished product.

“Longer windows give you the ability to go farther for production at better prices.” she said. ”Inadvertently, this could push more production on shore because the U.S. specializes in shorter lead times. Some things like cashmere and silk are not made in the U.S., but cotton is available here.

“What will happen is you will either buy less or pay more,” Champion said.

Jen Blackhurst, professor of business analytics at the University of Iowa Tippie College of Business, said the need to shorten lead times by moving production closer to the United States was in discussion before the pandemic.

“Some companies are looking at how to split where they are creating goods,” said Blackhurst, who teaches supply chain risk and disruption management.

ARTICLE CONTINUES BELOW ADVERTISEMENT

“There is a handbag company, Timbuk2, that offers custom bags and off-the-rack bags. The custom bags are made closer to home (San Francisco) and the off-the-rack bags, which are fairly standard, are manufactured in China.

“I actually don’t think people are going to buy less, but there is going to be a trade off with cost and lead times.”

Blackhurst said supply chains involve a variety of sources for items that make up the final product. While the fabric for clothing is supplied by one source, dye used to create the color is produced by another source.

The same is true for the buttons, snaps, thread and zippers. If any of the sources is shut down by something like a pandemic, the entire supply chain can be affected.

The recent U.S. Commerce Department report brought some good news for the apparel industry. Clothiers achieved a stunning 188 percent sales gain in May, but are still remain down 63 percent over the past 12 months.

Retail sales account for roughly half of all consumer spending, which fuels about 70 percent of total economic activity.

But these May figures could be attributed to pent-up consumer demand, though, and such robustness may not continue in coming months as economic and public health uncertainty continue.

And analysts caution that some of those May sales gains also probably reflect the impact of temporary government stimulus aid and expanded unemployment benefits in the face of a deep recession.

ARTICLE CONTINUES BELOW ADVERTISEMENT

The pandemic lockdowns sent many mall-based chains further into financial peril. Many retailers furloughed workers, slashed costs to preserve dwindling cash reserves and, in the cases of Neiman Marcus, J.Crew and J.C. Penney, filed for bankruptcy protection.

Associated Press contributed to this report.

Give us feedback

We value your trust and work hard to provide fair, accurate coverage. If you have found an error or omission in our reporting, tell us here.

Or if you have a story idea we should look into? Tell us here.

Give us feedback

We value your trust and work hard to provide fair, accurate coverage. If you have found an error or omission in our reporting, tell us here.

Or if you have a story idea we should look into? Tell us here.