Bangladesh
Apparel retailers
including H&M and Levi Strauss are at risk of facing heightened
supply chain disruptions, as a new wave of Covid cases, has prompted the
government of Bangladesh to start a week-long lockdown. The lockdown will
result in factories across the region to shut down, halting manufacturing. It
marks Bangladesh’s most severe lockdown to date, with people only
allowed to leave their homes for emergencies.
A new analysis from Panjiva, a
business line of S&P Global Market Intelligence, show Bangladeshi exporters
of apparel to the United States have been more resilient than nearby regions
during the pandemic. Shipments in the three months ended April 30 are down by
just 1.6%, compared with the same period of 2019, the firm said. Exporters from
India and Sri Lanka, in contrast, dropped 10.1% and 6.4%, respectively.
According to a data by the
Peterson Institute for International Economics, Bangladesh has been gaining market share
as China has become less competitive in labour-intensive sectors including
apparel.
The additional supply chain
disruptions will be hitting retail companies at a time when resources are
already strained due to a number of factors. A shortage of shipping
containers and a dearth of truck drivers have left inventory backlogged for
weeks. This is typically a time when retailers are placing orders for the
holiday season to ensure shelves are stocked during peak winter shopping.
The risk companies face is
running into out-of-stocks, leaving customers to look elsewhere.
Source: CNBC
Image Source: Google Images
Also Read: