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Lockdown threatens Bangladesh apparel retailers

Jul 02, 2021
Lockdown threatens Bangladesh apparel retailers


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

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