When demand drops at the consumer level, the blow dealt to the supply chain gains force the closer it gets to the source. It's a phenomenon called the "bullwhip effect" and with an 89% drop in U.S. apparel sales in April year over year, the industry is in the midst of a bullwhip for the ages.

 

"Global clothing supply chains have unraveled in just a few short weeks, as has the trust and goodwill between many buyers and manufacturers," said Leonie Barrie, apparel analyst at GlobalData, in emailed comments.

How apparel retailers and brands react to the falling demand will directly affect the amount and variety of manufacturing capacity available in major apparel producing countries when demand returns, and therefore the future of fashion sourcing. Read More