Supply Diversification — A Luxury for Luxury?

The coronavirus moment is turning out to be a watershed moment for fashion. Businesses ranging from fast fashion to luxury are being stress-tested on their models and resilience in every area of their operation. One question that has become the hallmark for businesses during these times of disruption is: How risk-proof is your supply chain? On March 8 when Italy’s government put 26 provinces in the country’s northern region under quarantine, it brought to forefront the long-standing dependence luxury fashion supply chains have on Italy. This quarantined area alone was home to more than half the country’s textile and apparel factories. With Italy, France and Spain manufacturing reeling under the fierce impacts of the virus, luxury brands are seeing their supply chain disrupted like never before. This pressure is further exasperated as now their Asian stores are opening and online shopping kept going through the shutdown. Traditional risk conversations and strategies in fashion supply chains have been more focused on supplier risks than a country or a region risk. And arguably so, as in living memory when has a whole country or region anywhere in the world shut down let alone Western Europe. Companies usually measure disruption risk in comparison to their home country

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