The shutdown of two contract manufacturers in Vietnam due to Covid-19 could worsen Nike’s sneaker supply problems, a market research company has warned.
The fact that South Korea’s Changshin Vietnam and Taiwan’s Pou Chen Corp in HCMC have stopped operating since last week “may exacerbate the supply chain disruptions that the company has had to deal with,” S&P Global Market Intelligence said in a report.
Vietnam accounted for 49 percent of U.S. seaborne imports linked to Nike and its products in the second quarter, it said.
Nike said in fiscal 2020 contract factories in Vietnam made roughly 50 percent of its branded footwear.
There is a refocusing on China, the report said, pointing out that in the second quarter of this year, growth of U.S. seaborne imports linked to Nike from Vietnam was 6.6 percent year-on-year while it was 54.6 percent for China.
A Nike spokeswoman told CNBC in an emailed statement: “We continue to work with our suppliers to support their efforts in response to the dynamic and unprecedented nature of Covid-19.”
Vietnam’s HCMC has recorded over 39,500 Covid-19 cases since April 27.