A surging COVID-19 outbreak that has halted production at two Nike Inc. suppliers in Vietnam is threatening the company’s global sneaker supply, multiple media outlets reported.
Chang Shin Vietnam Co. and Pou Chen Corp., two of Nike’s suppliers in Vietnam, idled facilities within the past week as the coronavirus swept through factories and communities, Reuters reported.
According to the footwear manufacturer, contract factories in Vietnam accounted for roughly 50% of total branded Nike footwear in fiscal 2020. Meanwhile, an analysis from Panjiva, a business line of S&P Global Market Intelligence, determined that Vietnam accounted for 49% of “U.S. seaborne imports linked to Nike and its products” in the second quarter of 2021, CNBC reported.
“The health and safety of our teammates, as well as that of our suppliers, remains our top priority,” a Nike spokeswoman told the network in an emailed statement.
“As we continue to navigate these circumstances, we expect our suppliers to prioritize the health and livelihoods of their employees and continue to comply with legal requirements and the Nike Code of Conduct on the provision of wages, benefits and severance. We are confident in Nike’s ability to navigate these near-term dynamics and we remain prudent in our planning,” she added.
Meanwhile, Christopher Rogers, a senior researcher at Panjiva, wrote in the report that Nike’s supply chain struggles could indicate “similar challenges” for other major sneaker brands, Market Watch reported.
According to CNBC, apparel brands such as Levi Strauss and H&M are facing similar supply chain disruptions in Bangladesh, a major global clothing manufacturing hub.
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