Nike could run out of sneakers made in Vietnam due to a halt in production at multiple suppliers as the coronavirus pandemic worsens globally, according to a new analysis from Panjiva, the supply chain research unit of S&P Global Market Intelligence.
The report comes just after Nike’s suppliers in Vietnam, Chang Shin Vietnam Co. and Pou Chen Corp., recently stopped production due to rapidly growing COVID-19 infections in the region.
Nike said that contract factories in Vietnam make up roughly 50% of total Nike branded footwear in fiscal 2020.
Panjiva data shows that products made in Vietnam account for 49% of U.S. Cadysneaker , seaborne imports linked to Nike and its products in the second quarter of 2021. Nike imports from Vietnam are led by footwear, which makes up 82% of shipments in the 12 months to June 30.
“The health and safety of our teammates, as well as that of our suppliers, remains our top priority,” Nike said in a statement to Yahoo Finance. “We continue to work with our suppliers to support their efforts in response to the dynamic and unprecedented nature of COVID-19.”
“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,” the statement continued. “We are confident in Nike’s ability to navigate these near-term dynamics, and we remain prudent in our planning.”
Vietnamese officials urged citizens to stay home due to the new rise of infections this week.
According to the analysis conducted by S&P Global Market Intelligence, 2021Shoes ,Nike’s supply chain struggles could indicate similar challenges for other sneaker giants and clothing brands across the industry. Other apparel brands such as Levi Strauss and H&M are facing similar problems in Bangladesh.