Clothing retailers delay orders, freeze hiring as tariffs hit

By Helen Reid and Nicholas P. Brown

LONDON/NEW YORK (Reuters) - Clothing and accessories retailers crossed the United States are delaying orders and freezing hiring up of tariff hikes that instrumentality effect Wednesday connected products imported from Vietnam and China.

These businesses, overmuch similar Nike and Lululemon, look an intolerable choice: offset the outgo of tariffs by raising prices by immoderate 40% - perchance cratering income - oregon sorb the outgo summation and further strain already-thin nett margins.

Unlike their bigger rivals, however, the smaller covering and shoemakers deficiency immense proviso chains, making them highly babelike connected Vietnam and China.

Ian Rosenberger, CEO of Day Owl, a six-year-old New York institution that makes backpacks successful Vietnam, has paused aboriginal orders. Unless there's a woody to importantly little Vietnamese tariffs, Rosenberger estimates Day Owl has 30 days earlier it folds.

But with a accumulation rhythm of astir 100 days, waiting overmuch longer risks missing the important back-to-school buying season. "The harm is already important capable to beryllium an existential threat," helium said, adding that his 7 employees person been asking if they should hole to beryllium retired of a job.

Rosenberger said tariffs would summation his work to $22 from from $5, prompting him to summation the terms of his top-end container to $212 from from $155.

Footwear Distributors and Retailers of America - whose members see Nike (NKE), Walmart (WMT), Skechers (SKX), and Deckers (DECK) - calculated that a $155 moving footwear made successful Vietnam would person to beryllium marked up to $220 successful U.S. stores to offset the 46% tariff.

Vietnam has developed specialised factories producing everything from high-tech moving shoes to way suits. It's the second-biggest root of apparel and shoes imported to the U.S. aft China, and a cardinal manufacturing hub for Nike, Adidas and others.

Vietnam has asked for a 45-day hold successful the imposition of U.S. tariffs, and said it would bargain much American goods, aft Trump and Vietnamese person To Lam agreed connected Friday to sermon a woody to region the levies.

Nike shares person dropped 14% since markets closed connected April 2, the time Trump announced tariffs, portion Adidas shares mislaid 16%, Puma (PUM.DE) shares are down 18%, and North Face-owner VF Corp shares fell 31%.

These large companies enactment with factories astir the world, providing them with immoderate negotiating clout to divided tariff costs with suppliers. VF Corp is "well diversified crossed our proviso concatenation to negociate tariffs," a spokesperson said.

Small businesses, specified arsenic Seattle, Washington-based women's moving marque Oiselle, person little capableness to sorb the cost, and less resources to program alternatives.