American sportswear company Under Armour is facing demand as well as supply constraints in the wake of the current condition in Vietnam, David E Bergman, Under Armour’s CFO, said during the Q2 earnings call earlier this month.
Bergman said: “We definitely employed demand constraint that we started to go into a little bit last year from a planning perspective, but the real impact is coming into this year relative to buying much, much tighter demand especially with certain accounts, non-premium accounts or things like that that we've been stepping out of.
“So there certainly is a demand constraint impact going on that we're expecting to be bigger in the back half of the year and we're doing that for the right reasons. But in addition, yes, our forecast does contemplate some of those supply chain pressures. We are seeing a little bit of delays in some of our products and that could lead to some cancellations here and there and other pressure points. So, we have included that in what we expect in our outlook for the back half of the year to a reasonable degree.”
Under Armour sources about a third of its products from Vietnam and may face stock issues in the second half of this year due to supply constraints and factory closures.
Adidas had also said that it could lose €500 million in sales if it fails to meet the demand due to factory closures in Vietnam.
Nike is another sportswear brand that will face the effects of the rising COVID cases in Vietnam as about 50 per cent of its footwear were sourced from Vietnam last year, while 49 per cent of its total seaborne imports to the US in the second quarter of 2021 came from the southeast Asian country.
Vietnam is currently dealing with the Delta variant of the virus, recording over 9,000 new cases daily.
Fibre2Fashion News Desk (KD)