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24 Mär 2020

Major apparel brands delay & cancel orders in response to pandemic, risking livelihoods of millions of garment workers in their supply chains

Major apparel brands and retailers are cancelling or postponing orders (including those already produced) as the COVID-19 pandemic forces store closures in Europe and the United States, risking the livelihoods of millions of garment workers in their supply chains. Suppliers in garment-producing countries have faced an onslaught of order cancellations, reduced order volumes and extended payment terms, which have left many having to reduce operations or stop them altogether, unable to bear the financial burden. This has forced many suppliers to lay off or suspend millions of factory workers, often without pay and severance, pushing an already precarious group of workers to greater economic vulnerability.

As it is standard practice for brands not to pay for products until after they are shipped, when an order is put on hold or cancelled, payments are also held or cancelled. Some brands have even reportedly asked for discounts on orders already shipped. Non-payment and reduced payment for orders risks leaving suppliers unable to pay wages owed to their workers. Meanwhile, concerns have been raised about companies paying large dividends to their shareholders after having offered little or no help to mitigate the impacts of the pandemic on suppliers and garment workers. 

Exporters and manufacturing associations have appealed to buyers asking them not to cancel orders and fulfil existing contractual obligations. H&M, Inditex, Marks & Spencer, Kiabi, PVH, VF Corporation and Target are among the brands that have confirmed they will receive and pay for placed orders from their suppliers. Worker Rights Consortium is tracking brand commitments here and Labour Behind the Label is tracking how UK brands are protecting supply chain workers here.

Labour groups and unions are calling on apparel brands and governments to urgently mitigate impacts on the 60 million garment workers bearing the brunt of the COVID-19 crisis. Their demands can be found here.