When US President Donald Trump and Iranian President Masoud Pezeshkian signed a 60-day ceasefire and de-escalation document on June 17, the development offered fashion companies weathering the months-long US-Iran conflict something short of certainty: a pause, a planning window and, perhaps, a chance to assess how much damage from the geopolitical crisis could be unwound.
The answer, so far, is complicated. The US remains at war with Iran, the ceasefire remains fragile, and renewed strikes have already threatened the detente as negotiations continue. For fashion, the question is less whether the industry can return to normal than what “normal” now means after another global chokepoint crisis, this time involving the Strait of Hormuz and renewed disruption around the Red Sea.
Across the industry, the response has varied from one brand to the next, and the changes are revealing: deeper reliance on trusted suppliers, longer lead-time assumptions, selective safety stock on core products, more attention to freight exposure and a sharper understanding that resilience is not simply a matter of having more options, but of knowing which options will actually hold under pressure.
Control becomes insurance
The disruption exposed both the strengths and limits of the vertically integrated model in place at Parker Clay, the California B Corp that produces sustainable leather bags, backpacks, and wallets in Ethiopia. The brand owns and operates its factory in Addis Ababa and sources full-grain leather from local Ethiopian suppliers, which insulates its sourcing and production from much of the turmoil. However, the pressure came later, once finished goods had to move out of the region.
As carriers suspended Red Sea transits and rerouted around the Cape of Good Hope, transit times to the US and Europe stretched by several weeks, while air freight costs rose. Parker Clay pulled shipments forward, air-freighted priority SKUs, built in longer lead-time buffers and increased safety stock on core styles, but it did not need to reshore or expand to additional sourcing locales, says Brittany Bentley, the company’s co-founder and chief creative officer. Its advantage was that the brand was already making product close to its raw materials.
“The biggest lesson is that where and how you make things is your best insurance,” Bentley says. “Being vertically integrated close to our raw materials meant a global shock hit us on one link — shipping — instead of every link.”
That distinction is central to how fashion is experiencing the crisis. The Strait of Hormuz is not, in a simple lane-by-lane sense, a major apparel sourcing route for the US market, as Asia dominates garment manufacturing and many shipments do not pass directly through the waterway. Yet the impact is still being felt through the broader system: freight costs, fuel prices, insurance, shipping schedules, supplier pricing, synthetic textile inputs and the cost of holding inventory at a time when tariffs, compliance pressures and softer consumer demand are already weighing on margins.
Dr. Sheng Lu, director of fashion and apparel studies at the University of Delaware, analyzed earnings call transcripts from approximately 30 major US fashion companies from May onward. They suggest that the industry’s biggest players are not launching another wave of sourcing relocations in response to Hormuz, he says. Instead, they are treating the geopolitical disruption as one of several external risks to be managed alongside tariffs, inflation, freight costs, macroeconomic uncertainty and changing consumer demand.
“The ongoing Hormuz crisis is accelerating existing diversification strategies rather than fundamentally changing fashion companies’ sourcing strategies,” Lu says. Most large American fashion companies have already spent the past several years reducing dependence on any single sourcing country, giving them more operational flexibility when new disruptions arise, he notes. In the latest reports to Wall Street investors and shareholders, companies were more likely to discuss inventory control, product receipts, delivery schedules, and assortment adjustments than supplier changes tied directly to the conflict.
