Within the U.S., the most direct financial impact of the crisis has
been on retail workers, idled by the ongoing shutdown of
brick-and-mortar stores as “non-essential” businesses. Online shopping
remains an option, but typically accounts for just 10 percent of fashion
sales, making it an unlikely savior during a prolonged shuttering of
The reverberations of retail’s hard shutdown were quickly felt in the
factories and among the producers of raw materials all around the
world, Lu said. Compared to the last recession, there are far more
stakeholders now, in more developing countries, making it likely that
lower-income workers will be hit more broadly this time.
The crisis is aggravated by the relatively thin social safety nets in
those developing countries, and by the relatively few alternatives to
clothing factory jobs, he noted. In Cambodia, 70% of exports are
apparel-related, and in Bangladesh, it’s 80%. Female workers — along
with their children — will certainly be disproportionately affected in
those countries, Lu said.
For U.S. consumers, the industry’s turmoil is likely to mean delays
in seeing new products and less variety in stores for the next two or
three years, Lu said. Retail prices on clothing and footwear also seem
likely to rise as factories scramble to rehire and retrain workers once
the pandemic has eased.
Ultimately, Lu said, the disruption may spark some structural changes
to what had become a complex web of supply chains, factories and shops,
each dependent on the other for survival. Some nations may move to
limit their exposure to the perils of globalization; others may further
diversify supply chains in an effort to safeguard trade flows, Lu said.
Article by Eric Ruth; photos by Kathy F. Atjkinson, Michael Levy and iStock
Published April 20, 2020