Vietnam has been forced to shut down several retail manufacturing facilities due to COVID-19 outbreaks, forcing many sports retailers to consider looking elsewhere.
The country is the second-largest supplier of shoes and apparel to the U.S. behind China.
- Adidas sources 28% of its product from Vietnam, but the company said in late August that most of its factory capacity hasn’t been available since the middle of July, contributing to roughly $600 million in lost sales.
- Nike could lose an estimated 160 million pairs of shoes due to its Vietnam facility closures, according to research firm BTIG. Ahead of the company’s earnings report on Thursday, analysts have downgraded their estimates on full-year sales, as they believe production is down 27% on footwear and 23% on apparel.
- Reports suggest that Dick’s Sporting Goods will likely be negatively affected by Nike’s problems, too. Wells Fargo analysts favored Academy Sports over Dick’s based on its H2 outlook.
Supply-chain experts say the shutdowns will further increase prices of goods — shoe prices rose 4.6% year-over-year in July. Adidas has already said it will look to raise prices.
It could be “at least 12, if not 18 months before supply chains get back to the state of equilibrium,” says Nick Vyas, co-founder of USC Marshall’s Center for Supply Chain Management.
Per Our World in Data, only 6.6% of Vietnam’s population had received two vaccination doses, and 21% had received one, as of Sept. 18."Factory" - Google News
September 21, 2021 at 04:04AM
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Sports Retailers May Turn From Vietnam Amid Factory Closings - Front Office Sports
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