COVID-19 leaves thousands of garment workers in Asia jobless; retailers agree to pay instead of cancelling orders

Author: Reuters, South China Morning Post, Published on: 23 May 2020

"Coronavirus cuts a swathe through Asia's garment industry, leaving thousands out of work", 19 May 2020

Commentary: Mauritius' labour law reform in response to COVID-19 weakens workers' rights, threatening fundamental labour rights

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...[T]housands of garment workers across Asia who have been laid off, according to labour rights campaign group the Workers Rights Consortium, and are now struggling to survive with little welfare support, mired in debt and in many cases reliant on food handouts.

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Next temporarily closed all its stores in Britain in March because of the coronavirus. The company said in a statement it had only cancelled some orders and "endeavoured to be fair" to its suppliers. KGG, the factory where Zar Chi Lwin worked, did not respond to requests for comment.

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Retailers generally place orders at least three months ahead of delivery and pay for the finished product when it is delivered. Initially most retailers cancelled all outstanding orders, but many adjusted their position...agreeing to pay for goods that had already been manufactured or were halfway through production.

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Some orders have been trickling back. Swedish fashion retailer H&M said it only paused orders for two weeks at the height of the virus outbreak. US-based Walmart, the world's largest retailer, said it placed new orders with Asian manufacturers....

Despite the new orders, several garment manufacturers said the low volume of work on the books means many factories in Myanmar, Bangladesh, and Cambodia will not be viable, which means many of the young women who make up most the workforce will no longer have jobs. [...]

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Inditex, the owner of Zara, said it will pay for orders from garment makers, whether finished or in production, according to the original payment schedule.

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Related companies: Hennes & Mauritz (H&M) Inditex Next Walmart