The United States clothing and accessories retailers are delaying orders and freezing hiring before the upload of tariffs that enters into force on Wednesday on products imported from Vietnam and China.
These companies, like Nike and Lululemon, face an impossible dilemma: to compensate for the cost of tariffs up 40% prices (which could reduce sales) or absorb the increase in costs and further reduce their already reduced benefit margins.
However, unlike their largest rivals, smaller clothing and footwear manufacturers lack large supply chains, which makes them very dependent on Vietnam and China.
Ian Rosenberger, executive director of Day Owl, a six -year -old New York company that manufactures backpacks in Vietnam, paused future orders. Unless an agreement is reached to significantly reduce Vietnamese tariffs, Rosenberger estimates that Day Owl has 30 days before its closure.
But with a production cycle of about 100 days, wait for much longer runs the risk of missing the crucial shopping season back to school.
“The damage is already significant enough to represent an existential threat,” he said, adding that his seven employees have been asking if they should prepare to lose their jobs.
Rosenberger said that tariffs would increase their tax of 5 to $ 22, which led him to increase the price of his high -end bag from 155 to 212 dollars.
The United States Footwear Distributors and Retail Association (Footwear Distributors and Retailers of America), whose members include Nike, Walmart, Skechers and Deckers, calculated that a 155 dollars manufactured shoe manufactured in Vietnam would have to have a price of up to 220 dollars in US stores to compensate for the 46%tariff.
Read more: Vietnam, the ‘Chinese factory’, is punished by Trump with 46% tariffs
Actions of large sportswear companies fall due to tariffs
Vietnam developed specialized factories that produce from high -tech sneakers to tracksuit. It is the second largest source of clothing and footwear imported to the United States after China, and a key manufacturing center for Nike, Adidas and other brands.
Vietnam requested a 45 -day delay in the imposition of American tariffs and said it would buy more American products, after Trump and the Vietnamese leader, to LAM, agreed on Friday to negotiate an agreement to eliminate the taxes.
Nike’s shares fell 14% since the closure of the markets on April 2, the day Trump announced the tariffs, while Adidas’s shares lost 16%, those of Puma 18% and those of VF Corp, owner of North Face, fell 31%.
These large companies work with factories worldwide, which provides some negotiating influence to divide tariff costs with suppliers. VF CORP is “well diversified in our supply chain to manage tariffs,” said a spokesman.
Small businesses, such as the Oiselle female sportswear brand, based in Seattle, Washington, have less capacity to absorb the cost and less resources to plan alternatives. Arielle Knutson, executive director of Oiselle, has asked its 14 full -time employees to work in two or three tariff contingency plans, in addition to their usual works.
Oiselle, which is supplied with leggings, sports fasteners and t -shirts to run from Vietnam, has delayed the spring orders of 2026 that would normally be sending now.
Asking for the right amount of product and not staying with too much money immobilized in inventory is key. “It’s a needle almost impossible to thread,” said Knutson.
The Wild Rye exterior clothing brand, based in ketchum, Idaho, is supplied with ski jackets and mountain cycling pants to suppliers in China, which will be subject to an additional 34% tariff from Wednesday.
“This will generate enormous pressure in the company,” said its founder, Cassie Abel. Abel has frozen hiring and salary increases for his 11 employees, and said the company would have to absorb part of the tariff increase to avoid a 40% increase in prices.
Day Owl, Oiselle and Wild Rye said they had previously tried to produce at the national level, but the quality was bad, so moving production to the United States is not practical.
With Reuters information.
Follow us on Google News to always keep you informed
