“We have never experienced difficulties like this. Since the end of last year, big companies have been receiving orders as small as a few hundred or a few thousand shirts just to give their employees jobs. The slowdown in orders, on top of the fact that the manufacturer had to halve pricing for finished products without compromising on quality, has hit its profit margins.”
THE SITUATION IN JULY
The good news for July is that things haven’t gotten worse. In fact, as old inventories are cleared and freight rates return to pre-pandemic levels two big burdens are being lifted.
Reduced inventories have put more brands and retailers in better cash positions. This should help provide more resources to restock – and to restock at levels that are more aligned with demand. With interest rates at a 20-year high, there is further incentive to keep inventories at a minimum.
Login to read this month’s summary of the INSIDE SOURCING – including new developments in key sourcing nations, plus major import data.
