Brands sourcing materials from the Chinese markets are facing delays. Big brands are closing their retail shops, factories have stopped their production, and deserted malls, especially in Wuhan province, have created a ripple across the global economy.
Approximately half of Nike-owned stores have been temporarily closed, with corresponding dynamics across partner stores. In addition, the brand is operating with reduced hours and experiencing lower than planned retail traffic in stores that do remain open. "In the short term, Nike expects the situation to have a material impact on our operations in Greater China. However, Nike’s brand and business momentum with the Chinese consumer remains strong, as reflected in the continued strength of Nike’s digital commerce business," said John Donahoe, president and CEO of Nike, Inc.
German sportswear brand Adidas too has closed a number of its stores in China. The brand said in a statement that coronavirus has strongly impacted its operations in China.
Giving an update on the impact of coronavirus, Burberry group CEO Marco Gobbetti said, "The outbreak of the coronavirus in China is having a material negative effect on luxury demand. While we cannot currently predict how long this situation will last, we remain confident in our strategy. In the meantime, we are taking mitigating actions and every precaution to help ensure the safety and well-being of our employees. We are extremely grateful for the incredible effort of our teams and our immediate thoughts are with the people directly impacted by this global health emergency."
Around 60 per cent of VF Corp owned and partner stores in China have been temporarily closed, while outlets that are currently open have experienced significant declines in retail traffic. "While the coronavirus will impact our financial results in the Asia Pacific region in the near term, VF’s growth opportunity in China and across the Asia Pacific region is significant and the fundamentals of our business are strong. VF is well positioned to navigate the impact of the coronavirus situation given the diversity of our business and operating model in other key geographies," a company spokesperson tweeted the quote attributed to Steve Rendle, VF’s chairman, president and CEO.
Fibre2Fashion News Desk (DD)
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