This morning, Kathmandu became the first local apparel retailer to formally address the coronavirus and its impact on distribution.
While the group sources product from a diverse range of markets throughout Asia, it confirmed it would be monitoring developments within its supply chain as a result of the outbreak.
Longer stock turns on technical product categories and sufficient inventory levels are reducing its short-term risk.
But as we wait for other retailers to announce their mitigation plans, it’s clear the outbreak is having a material impact on back-end operations and not just spending.
Several trade and sourcing events have already been cancelled or postponed, including Spinexpo and China International Optics Fair.
To effectively control the spread of the virus, at least 24 provinces, municipalities and regions in China have told businesses not to resume work before February 10 at the earliest.
Companies in Hubei province— the epicenter of the coronavirus outbreak—will remain closed until at least four days later.
Even in regions with no government mandate, some companies have voluntarily extended the Lunar New Year holiday, which was supposed to end last week, to protect workers from the virus.
With this comes added confusion however, as cities issue new health and safety mandates daily.
When workers and factories are cleared to resume production, reduced manpower and a bottleneck in orders could add further headaches and delays.
Is there a lesson to be learned here?
Possibly, if we consider what is taking place in the heavily China-reliant automotive industry.
This week, Hyundai Motor Company announced it will suspend production in South Korea due to supply disruptions provoked by the outbreak.
Global automakers have also extended factory closures in line with government guidelines. Those manufacturers include Hyundai, Tesla, Ford, PSA Peugeot Citroen, Nissan and Honda Motor Company.
Hyundai in particular, which has scaled production capacity in China over the past two decades, is likely to be most impacted as it imports more and more parts from China.
European carmakers on the other hand, have suffered disruptions only to their Chinese factories so far, with their European and US plants still running thanks to localised supply chains.
Volkswagen, Audi, BMW, Fiat Chrysler, General Motors Co, and Ford said their factories outside of China remain unaffected by supply bottlenecks.
Like any part of business - staff, ranging, price - diversification is key. Placing all your eggs in one basket has always carried some level of risk.
And as the pandemic shows no signs of slowing down, we have yet to see how far this risk could spread.