Columbia Sportswear, the popular sportswear and outdoor company, is grappling with major disruptions to its sales and supply chain operations due to the ongoing coronavirus outbreak. The closure of numerous stores in China and the broader impact of the virus are expected to greatly affect the company’s financial results for 2020.

At present, roughly half of Columbia’s owned and partner stores in China remain closed as a result of the outbreak. The stores that are open have experienced a significant decline in foot traffic and sales, which has had a substantial impact on the company’s overall performance in the region.

In addition to store closures, Columbia’s supply chain has also been severely disrupted. The company heavily relies on sourcing raw materials from China through its contract manufacturers. However, the temporary closure of factories, along with the delayed return of workers, has greatly hindered their ability to produce and deliver finished products on time. Furthermore, disruptions in the company’s distribution and logistics providers have further exacerbated the challenges.

These serious supply chain issues are expected to negatively impact Columbia’s ability to fulfill orders and meet consumer demand in a timely manner. Any delays in order fulfillment would also have implications for future seasons’ sales. In 2019, China accounted for approximately 5% of Columbia’s total net sales, while its Asia-direct business (including Japan and Korea) represented around 15% of total net sales. As a result, the virus has not only affected the company’s operations in China but also in Japan and Korea.

Tim Boyle, Columbia’s chairman, president, and CEO, has reassured stakeholders that there have been no reported cases of employees contracting the virus. Many employees have been working remotely to sustain business operations during this challenging time.

Overall, the coronavirus outbreak has dealt a significant blow to Columbia Sportswear’s sales and supply chain. The closures of stores, disruption in the supply chain, and declining consumer demand have all contributed to the challenges faced by the company. Until the situation returns to normal, Columbia expects a continued negative impact on sales in its Asia-direct business.

Useful links:
Columbia Sportswear’s official website
World Health Organization’s information on the coronavirus outbreak