This Popular Sportswear Brand Is Warning Customers of a Major Shortage
It's already affecting holiday production and delivery times.
Shoppers have been no strangers to shortages over the past year, as the pandemic has set off hoarding behaviors and supply chain disruptions. Recently, a number of COVID-related items have been low in stock around the country, as consumers have sought to stock up on cleaning supplies, water, toilet paper, and at-home coronavirus tests amid the continued surge of the Delta variant. But these essential items are not the only products missing from stores. Now, one of the most popular sportswear brands is warning customers about a major shortage that is likely to disrupt holiday purchases. Read on to find out what retailer may be hard to buy from soon.
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Nike is warning customers about a major shortage.
Nike has been hit by a series of supply chain problems, from shipping container shortages to a lack of workers, that is likely to create a shortage of the brand's products, CNN reported. The popular sportswear company warned customers on an earnings call on Sept. 23 that these issues will impact the production and delivery of its goods around the world through Spring 2022.
"We are not immune to the global supply chain headwinds that are challenging the [manufacturing] and movement of product around the world," Matthew Friend, Nike's chief financial officer, said on the earnings call, per CNN. "We expect all geographies to be impacted by these factors."
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Pandemic lockdowns also continue to affect the company's production.
According to Business Insider, Nike is also facing issues with strict pandemic lockdowns in Vietnam, where the sportswear company does a lot of its manufacturing. Vietnam imposed new restrictions in July and August, as COVID cases skyrocketed in major manufacturing hubs through the country, Reuters reported at the time. Factories for companies like Abercrombie & Fitch, Urban Outfitters, and Nike have seen extended closures as a result, heavily disrupting their production timelines, according to Axios. Friend said Nike has lost 10 weeks of production in Vietnam so far.
"Lost weeks of production combined with longer transit times will lead to inventory shortages in the marketplace for the next few quarters," Friend confirmed on the call, per Business Insider.
There is also a high demand for Nike products right now.
David Swartz, a Morningstar Research equity analyst who covers Nike, told Yahoo! Finance on Sept. 24 that the demand for Nike products is at an all-time high right now, which could present a problem for the company if they can't deliver due to shortages. "I do think that demand for Nike's products right now is very high, and the demand for all athletic apparel and footwear is high and has been high for, really, the last year-plus," Swartz explained.
"But it is a problem that if there are popular styles that are sold out, then consumers might buy other products from other producers, and that could, in time, prove to be a problem for Nike," he added.
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The sportswear retailer has had to extend its delivery timeframes.
During the earnings call, Nike confirmed that holiday production and delivery times have already been impacted by the issues with shipping containers, workers, factory closures, and high demand, per NBC. And this is something the company has already indicated online. "We've temporarily extended some delivery timeframes. The extended timeframes will be reflected in the estimated delivery date shown at checkout," Nike says on its site.
The company adds that customers might experience additional delays and disruptions with their Nike orders, as Nike fights supply-chain issues and focuses on the well-being of its employees. "In addition, please be aware that due to circumstances beyond our control some orders may be delayed beyond the estimated delivery dates," the sportswear retailer notes.
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