Apparel retailers draw contingency plans amid Lankan crisis
Apparel buyers and brands are looking at contingency plans to overcome the possibility of work disruptions against their orders as a result of the current upheaval in Sri Lanka.
One of the main clothing retailers in the UK told the Business Times that there is “quite a lot of nervousness with all the uncertainty going on”.
In this respect they, like many other brands and buyers, are looking at contingency plans though most may not have made any major decision to move elsewhere.
However any new growth plans they had already mapped out would be put on hold under the circumstances, it was pointed out.
In addition, companies are facing the pinch against the backdrop of a growing inflation in the purchasing markets and as a result orders are seen to drop.
“Buying power and inflation is also impacting and cotton prices are high and the overall buy will come down slightly anyway” it was noted but buyers feel that Sri Lanka’s situation is over and above that.
If the situation in Colombo worsens buyers and brands have already been opting to move orders to India and Bangladesh and even work with some suppliers that have multi country manufacturing. But this is not the case with all.
Ms. Nilukshi Gunawardena, Country Head for Carmel Clothing, a buyer in Sri Lanka, told the Business Times that they are being queried as to whether there could be delays in shipments but due to the uncertainty in the country they are facing a problem.
Orders have been pulled out since last month but some bookings are still there, she said adding that most brands are concerned and do not want to take a risk.
“We have orders only until August,” she said adding that her UK colleagues are considering placing orders elsewhere and Sri Lanka’s smaller factories are likely to face problems in this respect. Some of the smaller factory owners told the Business Times that buyers have become “really scared” about the current situation in Sri Lanka particularly due to the fuel issue, worker transport and curfew being imposed in the country.
One factory owner having operations in Bandaragama said that orders are being shifted out but some buyers due to their strong relationship with the owners continue for the moment like from the UK and West Asia.
With no government support they noted that they are currently struggling to survive as the demand for them has at the moment waned a bit.
Moreover, the concern is also due to other factors as well like concerns regarding the operations at the port and customs. But some factory owners believe they can be hopeful things might turnaround if they are able to obtain required fuel.
Carmel Clothing brings in orders around 100, 000 – 150, 000 pieces per month generating an income of US$500, 000 – 550, 000.
MAS Holdings’ Sri Lanka operations are continuing to function, Corporate Communications Director Surein Wijeyeratne told the Business Times. He explained that the company’s plants outside of Colombo have not been impacted so far by the protests.
He noted that while buyers are concerned, operations have continued unhindered. It was pointed out that due to MAS’ global footprint of operations, customers continued to have confidence in the company.
Mr. Wijeyeratne however, pointed out that it is mainly the SMEs in the apparel industry that have been impacted, particularly due to the shortage
of fuel.
Further, the impact of the global slowdown
will show in the future, but this is not directly due to the country’s situation, it was explained. Europe and the US are undergoing high inflation as a result of which orders are likely to reduce, it was noted.
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