Supply chains are completely interrupted in the current crisis and companies are looking into their sustainability more. It, however, has more than one face, argues Nick Fox, supply chain expert in the fashion industry. On the economic side resilience is being tested every day, but the planet has reached a level of sustainability not seen in a long time. ‘It is interesting how quickly the effects were seen and how much they are,’ Fox says.
With Easter just a few days away companies are weary. In supply chain terms, Christmas is also around the corner and it is hard to predict what would happen. Fox explains that in the fashion industry a lot of the production has been cancelled and large brands are finding themselves with piles of clothing in their warehouses.
‘There will be enough stock to answer the demand, but it could be the wrong type and at the wrong place,’ adds Fox. ‘While things on the surface look okay, it might be hard to balance everything.’
High Street brands were having problems way before the coronavirus and they are currently experiencing yet another blow. Fast fashion stores had to act radically, as their model would not have been able to sustain lack of customers. ‘Some brands have models that are closer to a supermarket, where you can pick a T-shirt for one pound. Had they not closed, they would have been in trouble,’ explains Fox.
'The entire supply chain would have choked up with unsellable products and they didn’t have an option.’
Others have been on the brink of closure for a long time and the virus could be the last thing to throw them out of the market for good.
The fashion industry has changed a lot in the recent years and started to increasingly rely on airfreight as times from production to store have shrunken. ‘Heathrow is running at its almost full capacity for freight,’ says Fox. For that to continue stores will need the market and the money for that.
‘Companies will have to try and make the best of the stock they already have because of the virus,’ Fox explains.
‘There is a lot of summer stock waiting and it has to be sold.’ The sales time period could be different. It is still unclear what retailer will do: start sales earlier or try to sell for a longer period at a higher margin. Fox expects to see a disruption in seasonality and the way stores sell their products could differ greatly from one retailer to the other.
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