German sportswear company Puma advised consumers to shop early for Christmas as supply bottlenecks and manufacturing disruptions would mean a shortage of its products well into 2022.
The company expects that Vietnam factory closures, compounded by shipping constraints, will hit its product supplies, even as the group increased its 2021 sales outlook. Puma, which reported stronger than expected third quarter results, also expects its sales in China to continue to be impacted by coronavirus lockdowns and a consumer boycott of Western brands triggered earlier this year by a political row.
Factories in Vietnam, a major supplier to the footwear industry, closed for 10 to 11 weeks due to Covid-19 outbreaks, but Puma Chief Executive Bjorn Gulden said they were now open again and should resume full production by the end of November.
But he said the closures would still impact supplies thorugh to the end of this year and into the first quarter of 2022, exacerbated by port congestion and a lack of shipping capacity. “If you want to buy Christmas presents, you should buy now,” Gulden told a briefing of reporters, adding that supply chain issues, compouned by higher costs of raw materials, could feed through to higher prices in the second half of 2022.
Rival Nike Inc cut its fiscal 2022 sales expectations last month and also said it expected delays during the holiday shopping season, blaming a supply chain crunch. Puma said sales in the third quarter, when the Vietnam closures had not yet hit supplies, rose a currency-adjusted 20.4% to 1.9 billion euros (US$ 2.21 billion) and operating profit jumped to 229 million euros, both beating analyst forecasts.