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Lockdown in Bangladesh threatens apparel retailers H&M, Levi’s, S&P Global says

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Desk Report :  According to  CNBC  report , apparel retailers including H&M and Levi Strauss are at risk of facing heightened supply chain disruptions, as regions of Southern Asia are bracing for intense lockdowns as Covid-19 cases spike, fueled by the more contagious delta variant.

A new analysis from Panjiva, a business line of S&P Global Market Intelligence, points out that this marks a stark reversal from a trend spotted earlier on in the pandemic. Then, Bangladeshi apparel manufacturers suffered from orders being canceled by retailers in Europe and the Americas, where Covid restrictions were much tighter.

Panjiva’s data show Bangladeshi exporters of apparel to the United States have been more resilient than nearby regions during the pandemic. Shipments in the three months ended April 30 are down by just 1.6%, compared with the same period of 2019, the firm said. Exporters from India and Sri Lanka, in contrast, dropped 10.1% and 6.4%, respectively.

Among the major retail brands with a presence in Bangladesh, shipments linked to H&M increased 13.5% in the three-months ended May 31, compared with the same period of 2019, Panjiva found. While imports associated with Levi’s fell 47.8%, and those with Calvin Klein-owner PVH dropped 68.7%.

Representatives from H&M, Levi’s and PVH didn’t immediately respond to CNBC’s requests for comment.

According to a September analysis of U.S. International Trade Commission data by the Peterson Institute for International Economics, Bangladesh has been gaining market share as China has become less competitive in labor-intensive sectors including apparel.

Key point of CNBC  report: 

  • A new wave of Covid-19 cases, especially along the Indian border, has prompted the government of Bangladesh to require its population of nearly 170 million people to remain at home for seven days, beginning Thursday.
  • Apparel retailers including H&M and Levi Strauss are at risk of facing heightened supply chain disruptions, according to an analysis from Panjiva.
  • As China has become less competitive in labor-intensive sectors including apparel, Bangladesh has gained market share.

 

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