Apple, to temporarily close its stores in China

Forex Distribution

This weekend, Apple announced that all stores in China will be closed, at least temporarily, as they are looking forward to stemming from a coronavirus outbreak after more than 200 people died inside the country.

“Out of an abundance of caution and based on the latest advice from leading health experts, we’re closing all our corporate offices, stores and contact centers in mainland China through February 9,” an official statement released by the company says.

Can this affect Apple’s global business as well?

Currently, the Cupertino-based company operates over 40 stores in mainland China, not to mention that most of its products are manufactured here, in factories owned and operated by contractors, including electronics giant Foxconn.

The latter didn’t make any announcements so far regarding any changes made to the production timeline but it appears that Apple took this scenario into consideration, as it could have a big global impact on the company’s activity, not just in China.

According to a report from NPR, CEO Tim Cook had an earnings call on January 28 and revealed that they are now working on a backup plan so they can minimize any potential disruptions in supply.

Big names are worried

Following this announcement, Apple joins the club of American giants who temporarily suspended their business in China, alongside Starbucks, McDonald’s and KFC. However, such a move isn’t expected to drastically affect its stocks, at least in the long-term, since investors are aware that it’s just a safety measure.

The first case of coronavirus was reported in December, in Wuhan, China, and ever since it began to spread rapidly, most cases being reported within the country. So far, over 12,000 people were reportedly infected in mainland China, according to an official count.

Over the next weeks, even more, companies are expected to suspend their business. And if the coronavirus-caused crisis continues, it won’t be a surprise to see this affecting stocks, considering the financial power of the Chinese market.

Morgan Stanley chief executive James Gorman