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How Vietnam’s Factory Closures Affect Nike, adidas, and Others

author
Luis Torres

COVID-19 has resulted in a massive shakeup for the sneaker industry. From brands and retailers abandoning any in-person releases to factory shutdowns due to COVID outbreaks, the pandemic continues to complicate the industry as the Delta variant spreads.

In late June, our Unboxed newsletter addressed that Nike’s Vietnam factories would experience a temporary closer as a result of an outbreak of cases. However, the situation has worsened for not only the Swoosh but other brands including adidas, Under Armour, and HOKA ONE ONE as some of Vietnam’s factories have closed since July. The implications are massive for these brands and the sneaker experience as Vietnam is the second-biggest host nation for factories, behind China.

With delays, partial shipments, and unconfirmed releases already prominent since the beginning of 2021, the Vietnam factory shutdowns could add another layer of complexity. While the factories are set to open on September 15, the months ahead are already at risk.

“While the situation is fluid, we hear performance footwear has been suffering the most severe delays and is at increasing risk for cancellations for spring ’22,” mentioned BTIG’s lifestyle and wellness analyst, Camilo Lyon, to Footwear News.

Lyon added that the shutdown has resulted in a loss of 80 million pairs total for Nike and could very well extend for another 80 million, totaling 160 million pairs lost for the Swoosh.

“While Nike typically is incredibly well-equipped to manage such disruptions, we fear this issue is just too large to control, even for the best-run athletic brand in the world.”

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