The big consumer brands are having millions losses because they have had to close their stores.
4 min read
The current coronavirus pandemic that originated in the Chinese province of Wuhan has not only left thousands of people affected, it is also hitting the textile and consumer industry. Hundreds of stores have closed due to the impact of the health emergency .
According to a CNN report, sports brands such as Nike and Adidas have ceased operations because the risk of contagion is so high that Chinese authorities have suspended operations in entire cities and public transportation.
More than a simple sanitary precaution, the closure of these stores severely affects the operations of these brands in Asia since they are of high consumption in the second most powerful market in the world. To give us an idea: only in 2019 Nike sold more than 6 billion dollars, but investors from around the world expect that with the closure of premises in nearby areas to Wuhan and the cut in hours in the few that remain in operation prevent that The brand regains its sales, at least in 2020.
“In the short term, we expect the situation to have a material impact on our operations in Greater China,” Nike said in a statement Tuesday.
It is not a little alarming fact, since as CNN mentions, 23% of the world's footwear is produced in China.
Adidas and Versace also put on “the mask”
Nike is not the only brand that is taking precautions because of the high rates of infection that coronavirus has, although it should be noted that its mortality is relatively low compared to other conditions such as SARS .
Adidas also closed several stores, and according to Bloomberg , the coronavirus has severely depleted its sales.
Other brands that are also having a bad time are the Swedish HM that has ceased operations in 45 stores, while GAP cut the schedule of the few that it has left in operation. Inditex Group , which has more than 600 stores in China,
For its part, and Capri Holdings , owner of Versace, Jimmy Choo and Michael Kors , has already warned its investors that their sales for the quarter will be severely affected by the situation in China.
“The situation in China and the measures being taken to protect the population are having a material impact on our business,” said John Idol, CEO of Capri Holdings, in a statement Wednesday.
And one more thing…
Apple has also decided not to expose its customers and workers and announced that all of its 42 stores in China will close until February 9 “as a precaution,” but hoped that this crisis will affect its global distribution chain. Starbucks also said the Last week it closed more than half of its approximately 4,300 coffee shops in mainland China.
And of course, the fall of Chinese tourists has caused airlines such as American Airlines to suspend all its flights to the Asian giant until March 27 and Delta Airlines to do so until April 30.
The coronavirus outbreak that was released on December 31, 2019 and that originated in Wuhan, China, has claimed the lives of nearly 500 people and infected more than 24,500.