As workers in China begin returning to work after the coronavirus-extended Lunar New Year break, experts are predicting modest supply chain delays but say there is no cause for retailer panic.

While a number of retailers, including fashion brand Superdry and furniture specialist DFS, have confirmed the possibility of small delays due to the ongoing coronavirus outbreak in China they are taking steps to mitigate any impact on revenues, according to an analyst note from Jefferies.

Superdry said it does not expect the “impact to be material” but has established a working group to “review and mitigate as needed”, including investigating the possibility of airfreighting wholesale stock and cancelling stock if it has sufficient options already available.

The retailer is also looking to rephase deliveries to prioritise jackets to ensure it has early-season demand, cancel the tail of some ranges and has looked to shift supply to regions such as Turkey or India to free up capacity.

DFS said its Chinese manufacturers have reopened – albeit a week later than expected and with reduced shifts – which would lead to an increased customer wait times of between one and two weeks.

AO.com is concerned over the supply of certain components but does not believe the worst-affected regions in China have “significant electricals manufacturing”.

The Jefferies note said the clothing industry in particular “benefits from diversity of supply”, highlighting that fast fashion giant Boohoo has been one of the least affected by coronavirus as it sources less than 50% of its product from outside the UK and its short production runs means it can switch suppliers easily.

Asos also sources from multiple territories and only sources 25% of its Design product from China. Jefferies also noted its factories are typically along the east coast of China rather than in the more-central Wuhan region.

While the note said there was no need for UK retailers to “panic”, a number of international fashion and luxury brands have already started to report material hits to profits and sales.

Yesterday, Under Armour warned its revenues in the first quarter would take a $50m to $60m hit due to the coronavirus outbreak.

British fashion house Burberry has scrapped its financial guidance for the year and warned the epidemic was slashing sales in its Chinese stores by three-quarters.

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