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US Spring Collection Shelves Set to Stay Bare as Virus Hits Sourcing

Despite a last-minute relocation and a sudden ban on the entry of recent visitors to China into the US, the decision was taken that the Sourcing at Magic event would carry on regardless. With hindsight, though, did it prove the right move?

Photo: Unsourced: Could empty hangers be one consequence of the coronavirus? (Shutterstock.com)
Unsourced: Could empty hangers be one consequence of the coronavirus?
Photo: Unsourced: Could empty hangers be one consequence of the coronavirus? (Shutterstock.com)
Unsourced: Could empty hangers be one consequence of the coronavirus?

While it's somewhat rare that trade shows are directly affected by global events, that was pretty much the case at last month's Sourcing, part of the biannual, Las Vegas-hosted Magic series of apparel and fashion trade shows. Certainly, the coronavirus outbreak – and, in particular, its impact on global supply chains and travel arrangements – left the organisers with something of a headache, even if they were otherwise relatively symptom-free.

For its February 2020 iteration only, this saw Magic abandon the Las Vegas Convention Center, its home for many a year, and shift to the nearby Mandalay Bay Convention Center. As it's something of a smaller venue, this saw Sourcing consigned to a series of temporary, free-standing pavilions and – while they were connected to Mandalay Bay proper via a regular shuttle service – it consequently felt a little out on a limb.

In another development that almost certainly brought show organisers out in a sweat, on 31 January, just days before the event was due to open, the US government banned any foreign nationals who had visited China in the previous fortnight from entering the country. This effectively barred a substantial proportion of would-be exhibitors from attending.

Inevitably, this obliged the organisers to consider whether to postpone the event entirely or whether it might still be viable to stage it in a revised format. In the end, they went for the latter option, deftly rearranging the floorplans and virtually dispensing with the section traditionally dedicated to mainland China-based manufacturers, while all the time looking to mitigate the health risks for any delegates bold enough to actually turn up. Ultimately, with more than half the booked Chinese manufacturers unable to attend, the new floorplan was somewhat scaled down, but was at least in place before the doors were due to open.

Commenting on the pre-event contortions, Tom Nastos, Chief Commercial Officer of the Fashion Group of Informa Exhibitions, the business behind Magic, said: "The night before the show, I was standing in the pavilion and thinking that if people have come halfway around the world to attend this event, there's no way we're going to let them down."

Perhaps endorsing the good faith shown by the organisers, once the overall event got underway, the Sourcing pavilion became surprisingly busy. This saw many companies prioritising a visit as they sought to figure out how to prop up their crumbling supply chains in time for the spring season. It was an issue also under discussion at the Logistics of Fashion seminar, a standing-room-only presentation courtesy of Robert Krieger, President of Krieger Worldwide, a California-headquartered freight-forwarding specialist.

Assessing the current situation, he said: "The best prognosis I heard is that the supply chain will be disrupted for a couple of weeks. That might be too optimistic and I'd say it will be at least a month, maybe two. Once the virus is under control, it will take weeks, if not months, for the airlines and the container-shipping lines to get back on track.

"Air-freight rates and ocean-freight rates are also likely to go up tremendously. Even if you're making products in Malaysia or Vietnam, much of the fabric will be coming from China, so the entire supply chain in Asia will suffer from disruption."

Krieger also stressed that goods coming from China are not subject to quarantine, only people, while noting that the value of mainland-manufactured merchandise already in the US had gone up sharply in recent weeks. Many of the major retailers realised they may not get their spring shipments and are running the risk of having empty shelves. Assessing the implications of this, he said: "They'll be buying a lot of the merchandise that they'd previously turned down, while companies that had bought overstock will now get an opportunity to sell on at a considerable profit."

Photo: Summery shirts: A shortage in waiting.
Summery shirts: A shortage in waiting.
Photo: Summery shirts: A shortage in waiting.
Summery shirts: A shortage in waiting.
Photo: Pavilion perusing down Las Vegas way.
Pavilion perusing down Las Vegas way.
Photo: Pavilion perusing down Las Vegas way.
Pavilion perusing down Las Vegas way.

Krieger's words certainly struck a chord with at least one exhibitor – Nick Kim, the Operations Manager of Miss Me, a California-based fashion brand. Clearly concerned about the spring season, he said: "Our factories and vendors are telling us that they plan to reopen in a couple of weeks, but I suspect it will drag on far longer and have a major impact on us.

"At the moment, we're talking to buyers and trying to get extensions. We're going to try to accommodate them as much as we can, while offering them discounts on our leftover stock to get that on the floor as much as we possibly can."

Another exhibitor obliged to radically reassess its sourcing protocols was Be Fulfilled, a Utah-based specialist importer. Outlining the company's current situation, President John Brown said: "We had finalised a substantial T-shirt order with a client just before the true extent of the coronavirus issue became apparent. We were in the process of submitting it to our suppliers in China, but ultimately switched it to Honduras as we were concerned about possible delays."

Brown was attending the event partly to review the sourcing possibilities offered by Pakistan. While his company has done business there in the past, for the first time, it was actively considering making it its primary apparel hub.

At the same time, though, he was keen to emphasise that China remained an important part of the company's business strategy, saying: "With certain items, such as knits and synthetic blends, it's just not practical to source them outside of China. I've talked to Romanian and Indian suppliers in both categories and they both came in about 20% higher in cost terms because of the duties payable."

One of the upsides of there being fewer exhibitors overall, of course, was greater footfall for the companies that had made their way Las Vegas-wards. One clear beneficiary of this was Prostandard, a Taiwanese clothing manufacturer.

Clearly more than satisfied with the company's reception at the show, Sales Manager Serene Hsu said: "Prior to the event, we were a little concerned that visitors would be deterred by the high number of Asian exhibitors. As it turned out, there are comparatively few and we have had a substantial number of enquiries, partly because there were few alternatives."

Another satisfied exhibitor was Jason Chow, managing director of Jantex International, a Hangzhou-based clothing manufacturer / exporter. Admitting to some reservations, though, he said: "While more customers have approached us than in any other year, I still hope that the current situation, which has made things very difficult for China and the whole of the global supply chain, will be resolved soon. It's inevitably been very bad for business and has driven up material costs.

"China, though, is very resilient. It's still the best place to do business as it offers quality, greater efficiency and faster turnaround times. If you're particularly sensitive to price, China might appear more expensive than, say, Cambodia, but the cost across the whole region is set to rise. At the end of the day, if you're committed to maintaining a high-end business, my advice would be to stay with China. It's uniquely flexible and highly adept at delivering on price stability."

Photo: Sourcing at Magic 2020: On the whole, less jumping for joy than in previous years.
Sourcing at Magic 2020: On the whole, less jumping for joy than in previous years.
Photo: Sourcing at Magic 2020: On the whole, less jumping for joy than in previous years.
Sourcing at Magic 2020: On the whole, less jumping for joy than in previous years.

The winter 2020 edition of Sourcing at Magic took place from 4-7 February at the Mandalay Bay Convention Center in Las Vegas.

Anna Huddleston, Special Correspondent, Las Vegas

Content provided by Picture: HKTDC Research
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