About a month ago, COVID lockdowns throughout Vietnam (a mega manufacturing hub for major US brands) posed serious issues for companies adapting to post-COVID demand. Now, they’re getting worse.
In August, Abercrombie & Fitch CEO Scott Lipesky said “We are working through an extended closure of factories in Southern Vietnam.” Urban Outfitters CEO Richard Hayne shared the sentiment, saying that “We have a lot of product there, and we’re trying to get it in” regarding huge swaths of supply stuck in Vietnam mid-lockdown.
As it turns out, August was an omen of bad things to come. After Trump’s anti-China tariffs, companies sought factories in other locations. Vietnam was one of them. Some companies like Gap, Lululemon, and Nike manufacture anywhere between 31-50% of their products in Vietnam now. But with the supply chain in flux, U.S. businesses are rethinking their manufacturing presence in the country.
Nike lost out on 100 million pairs of shoes due to Delta variant-related lockdowns in Vietnam.
Lululemon has started shipping goods on airplanes to keep up with demand.
And Bed Bath and Beyond’s own pre-holiday earnings served as a warning for the rest of U.S. retail: expect supply-chain issues this holiday season.
Jeez, did the Grinch steal supply?