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J.C. Penney, PVH accelerate Vietnam apparel imports as demand slides

Bangladesh 23 China 2600 Cons. Discr. - Apparel 372 Cons. Discr. - Retailing 309 U.S. 4626 Vietnam 287

Vietnamese apparel manufacturers are struggling as demand for clothing disappears in key markets, Nikkei reports. Panjiva data shows that total U.S. imports of apparel (clothing and shoes) from Vietnam increased 9.9% year over year in the three months to Feb 29 ahead of the widespread closures of U.S. retail. The removal of manufacturing lockdowns in other countries may put pressure on Vietnamese producers for scarce orders in the U.S.

Bangladesh is one nation that just reopened – shipments to the U.S. had already increased by 9.6% year over year in the same period. Shipments from China meanwhile dropped as a result of the coronavirus lockdown that started during the lunar new year and resulted in a 30.5% drop in exports as discussed in Panjiva’s research of Apr 9.

VIETNAM GAINS ON CHINA IN U.S. APPAREL MARKET

Chart segments U.S. imports to the U.S. of HS 61, 62, and 64 on a monthly and three month basis. Source: Panjiva

Companies that have significant sourcing from Vietnam include Adidas, J.C. Penney, and PVH Corporation (Calvin Klein, Tommy Hilfiger). Panjiva’s U.S. seaborne import data shows that imports associated with Adidas fell by 29.4% year over year in Q1, that followed a protracted downturn over the prior two quarters and so may not be purely COVID-19 related.

J.C. Penney and PVH meanwhile increased shipments from Vietnam by 68.1% and 34.7% respectively in Q1. That raises the risk of a significant build up of inventory if sales don’t rapidly recover.

ADIDAS TRIMS APPAREL IMPORTS AS J.C. PENNEY, PVH LOAD UP

Chart segments U.S. seaborne imports associated with Adidas, J.C. Penney, and PVH by quarterly year over year change. Source: Panjiva

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