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Cancellations Strain Soorty Enterprises’ Vertical Operations

Being a vertically integrated denim manufacturing company has its benefits on most days. Being a one-stop-shop can help drive efficiency and ensure accountability, but the shutdowns forced into place by the global coronavirus crisis is straining the resources of all-in-one companies.

In an interview with Kingpins24 founder Andrew Olah, Soorty Enterprises director Asad Soorty shared how the Pakistan-based vertical denim manufacturing company is planning to position itself to address new consumer needs.

“It’s a global problem—it’s not any one company that is going through it, but it is grim. It is dire,” Soorty said, noting that he expects just 10-20 percent of the company’s current capacity is being filled. “We have experienced a lot of order cancellations and postponements.”

As a vertical company, Soorty cannot stop payments to suppliers. “We own the fabric mill; we own the spinning mill,” he said. “We’ve bought cotton for many months ahead so there is a lot of capital that is [tied up] right now.” Though he described Soorty as a financially strong and healthy company, returning stronger post COVID-19 will rely on customers and brands understanding the “problems on the ground” so the firm can get out of the pandemic with some financial discipline.

Soorty views the future in two ways. In the next 18 months, as the coronavirus pandemic persists, he expects to see a more conscious consumer—both price conscious and more cognizant of the environment and where products come from. With “the world flipped on its head entirely,” he said Soorty can be a great partner for most of its clients because it anticipated these shifts.

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The sustainable, vertically integrated setup includes production for Cradle 2 Cradle-certified garments and fabrics. The company is also executing its own environmental footprint assessments, which Soorty said can be utilized by brands. “And of course we’re a very efficient company [with] good prices and short lead times,” he said. “These are things that I think will be appreciated in the market for the next year and a half.”

Beyond that, Soorty envisions a future that will either bring a vaccine and everyone is back “to their old ways of fast fashion,” or he said the crisis will last long enough for people to come back and be more difficult to satisfy.

“This category is so discretionary that you always have to reinvent yourself in order to maintain [relevance] and I think it’s going to be quite challenging,” Soorty said. However, with the right supply chain and retail partners, he believes companies can stay relevant and maintain some of their revenue.

“Now is the time to divest so in a state of recovery we can come back even stronger,” Soorty said. “I think we’ve built the right base to manage for the future. We just appeal to our buyers to not be like the global corporation standard that we currently see,” he said, noting the ongoing rift between China and the U.S. as an example.

“Everyone should be standing united at this time,” he added.

“I think if this industry can unite and understand the problems that every part of the supply chain is facing including the most vulnerable amongst us, which are our workers, then we can come out of this stronger,” Soorty said.