Nike, Gap, Urban Outfitters and other retailers are warning lockdowns in Vietnam are wreaking havoc on supply chains
- Vietnam is under a strict lockdown as COVID-19 cases continue to rise around the country.
- Clothing brands like Urban Outfitters and Abercrombie & Fitch say these lockdowns are hurting the supply chain.
- The coffee industry is also taking a hit, because Vietnam is the second largest supplier of coffee beans.
Clothing companies are having a hard time meeting customer demand amid strict lockdowns in Vietnam as COVID-19 continues to spread, Axios first reported.
Vietnam is a huge manufacturer for many American clothing brands, and as the virus continues to spread, companies are having trouble getting inventory in stock to keeping up with the demand for clothes now that restrictions have been lifted in the US.
"I would say our biggest concern right now is actually getting the inventory," Richard Hayne, CEO of Urban Outfitters said in an earnings call Tuesday. "Not when it's going to come in, or how much it's going to cost. We are -- we have a situation in Vietnam. I'm sure other people have the exact same situation where the country is completely closed."
Vietnam had fewer than 2,000 cases prior to July of this year, but has since reported numbers topping 10,000 since the beginning of August, according to data from Our World Data.
Some of the biggest brands in the US get most of their goods from Vietnam, according to data from Bank of America. "Gap and Lululemon Athletica each source about a third of their production from Vietnam," the bank's analysts found. Nike sources 51% of its footwear and 30% of its apparel from the country," Axios says.
With strict lockdowns underway, it's become very difficult for brands to get the clothes they need.
"On the supply chain constraints, yeah, I'd say right now, it's tough out there," Scott Lipesky, Executive Vice President and CFO at Abercrombie & Fitch said in an earnings call Thursday. "All the articles you read are real and we're all -- those of us on this side of the fence are living through it every day.
But, the clothing supply chain isn't the only industry taking a hit. Vietnam is the second-largest supplier of coffee beans in the world, and as the country remains under lockdown the supply chain is struggling to keep up with demand.