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S&P Global Market Intelligence’s supply chain research unit Nike (NKE) may be running out of Vietnamese-made sneakers due to a production shutdown at three Vietnamese factories in China, according to a new analysis from Panjiva. due to the increase in COVID-19 infections in the region.
Vietnam is crucial for Nike’s supply chain. Panjiva data shows that domestically produced products account for 49.0% of US maritime imports related to Nike and its products in the second quarter of 2021. Nike footwear imports from Vietnam were included in 82.0% of shipments during 12 months to June 30 after climbing 28.8% in the second quarter of 2021 from a year earlier.
A statement from Nike given to Yahoo Finance says the sportswear giant is committed to the well-being of its employees and that the company believes it can sidestep current supply chain challenges.
“The health and safety of our teammates, as well as that of our suppliers, remains our top priority. We continue to work with our suppliers to support their efforts in response to the dynamic and unprecedented nature of COVID-19, ”the statement read.
“As we continue to navigate these circumstances, we expect our suppliers to prioritize the health and livelihoods of their employees and to continue to comply with legal requirements and the Code of Conduct. Nike regarding the award of salaries, benefits and severance pay. We are confident in Nike’s ability to navigate these short-term dynamics and remain cautious in our planning, ”the statement continued.
On July 18, Vietnamese officials in the capital Hanoi urged citizens to stay home for the start of the work week due to new pockets of infection. All non-essential services have also been cut off in the city and indoor restaurants, gyms and lounges.
Nike, however, may not be the only shoe manufacturer likely to experience a slowdown in Vietnamese production, as there are many companies producing their shoes in the region. Wolverine World Wide Inc. (WWW), owner of the Saucony brand, and Puma (PMMAF) recorded the largest increase in Vietnamese imports in the second quarter, at 160.7% and 122.7%, respectively, according to the report.
Panjiva analysis of US Census Bureau data shows supply chain activity lags as retail sales of leisure items and clothing continue to rise in June. Total retail sales increased 18.5% year over year, and sales excluding automobiles and fuel increased 16.1%.
According to analysis by Christopher Rogers, associate of S&P Global Market Intelligence, the fastest growth rate was recorded in sporting and leisure goods, which grew by 41.5%. E-commerce sales also rose 38.3% in June, from 26.3% in May.
Reggie Wade is a writer for Yahoo Finance. Follow him on Twitter at @ReggieWade.
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