The majority of the 38 stores in China operated by the yoga-inspired activewear brand have been closed since Feb. 3, the company said. “The company’s online business has continued to operate,” Lululemon said, adding that it continues to “monitor the situation.”
“We’re inspired by the resilience and commitment of our team in China as we navigate the emerging impacts of the coronavirus. The safety of our people is our highest priority, and we are adjusting store operations based upon the recommendations of local authorities,” CEO Calvin McDonald said. “Despite the current disruption to our growing business in China, we remain confident in the long-term opportunities this market holds for Lululemon.”
China locked down parts of the country in late January as the Chinese New Year holiday got underway in an effort to contain the outbreak. The government eventually extended the annual weeklong break, and even instituted travel restrictions, to keep the virus from spreading.
Many fashion firms have followed the guidelines of local authorities and temporarily closed stores, or limited store hours, as they worked to determine how to best protect both residents and their employees in the country.
Several firms in the luxury space, including Ralph Lauren Corp., Tapestry Inc., Capri Holdings Ltd., Burberry Group Plc and The Kering Group, have all warned about the impact of virus-mitigating measures on their quarterly outlook. Because the situation remains fluid, uncertainty remains over how the virus will progress and perhaps even worsen.
And no one really knows yet what the impact could be on their supply chains and factory production. Most factories that are starting to reopen are on reduced capacity mode, and they need to ramp back up to pre-lunar holiday levels. But with many workers still under quarantine and as travel restrictions have remained in place, it’s anyone’s guess on the timing for when factories can ramp up production.
Wall Street analysts expect that most fashion brands should be in good shape for spring and summer deliveries because most of those goods were shipped ahead of the Chinese New Year break. Late summer and fall deliveries, however, could be affected by production delays.