American fashion brands warn that it will be difficult for them to survive without government assistance. Demand for new products has disappeared over the past few months due to the coronavirus outbreak, which has resulted in stores closing indefinitely. At the same time, when the number of corona virus patients swelled in the United States, health authorities and hospitals suffered from a lack of masks and other protective equipment.
Given this situation and with more than 50,000 fashion shops closed across the state, many brands not only complement the lack of protective equipment but also look for survival strategies. This includes a number of fashion brands that are combating pandemics with the US government by producing surgical masks, N-95 respirators, and other medical equipment.
Shifting the Fashion Brand to Mask Production
Fashion brands and retailers are shifting production lines from making apparel to making masks and dresses, while many of them direct their own supply of masks to health workers. The Gap, Inc. (GPS – Free report), reportedly, is working with its manufacturing partners to explore the production of fabric masks and other protective equipment for care givers.
The giant clothing company is looking for a solution to use excess production capacity of garments for cloth masks and additional protective equipment. HanesBrands, Inc. (HBI – Free report) is a garment maker that has a contract with the US government to produce cotton masks. The company has already begun production and plans to produce 1.5 million masks every week, using its design and pattern.
Canada Goose Holdings Inc (GOOS – Free report) has increased the production of dresses and scrubs at its two facilities in Canada with minimum workers. The company aims to donate scrubs and dresses to healthcare workers in the United States. Ralph Lauren Corporation (RL – Free report) is working to produce 250,000 masks and 25,000 isolation gowns that meet FDA standards. Gap and HanesBrands each carry Zacks Ranking # 3 (Hold). You can see a complete list of Zacks # 1 Rank (Buy Strong) shares today here.
The Fashion Industry in Crisis
The $ 2.5 trillion global fashion industry has taken a big blow after the coronavirus outbreak. Global fashion sales are expected to fall by around 30% by 2020, according to a report by Business of Fashion (BoF) and consultancy McKinsey. American retail giants such as Macy’s, Inc. (M. – Free report) and Nordstrom, Inc. (JWN – Free report) has closed all their stores and bled.
Meanwhile, after witnessing the largest daily increase in COVID-19 deaths from 68, on April 8, California governor Gavin Newsom said that the state was ready to spend nearly $ 1 billion to buy up to 200 million masks each month to increase its inventory.
In early March, the United States had only 12 million N-95 respirators and 30 million surgical masks, only 1% of what was estimated to be needed during this pandemic. Whereas companies like 3M Company (MMM – Free report) and Honeywell International, Inc. (HON – Free report), which is a traditional mask maker, struggling to keep pace with the increasing demand, it is clearly a good step by clothing makers to switch to mask manufacturing because their core business is stalled.
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