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Press Release

Major fashion brands record profits while vulnerable workers languish in poverty

UN Women/Fahad Abdullah Kaizer

London, UK: Human rights charity, Business & Human Rights Resource Centre today launched new findings outlining how the fashion industry is responding to the COVID-19 pandemic. It found a mismatch between industry rhetoric of unprecedented challenges and their lack of policy development to ensure worker rights are adequately protected. Fifty fashion companies were invited to respond (34 responded) to questions regarding responsible actions taken to respond to garment workers’ rights during the pandemic.

  • More than half (29) of the brands recorded profits since the onset of the pandemic
    • Of these, nine have still not committed to pay for all orders
    • Of these, 10 did not respond to the survey
  • Only oneCalvin Klein parent company, PVH - has implemented a pandemic policy with factory suppliers to ensure vulnerable workers are not being disproportionately targeted for layoffs
    • However, 25 indicated they have a pre-existing policy which covers this and seven said they had recently reiterated this policy to their suppliers.
  • British brands, Topshop, Boohoo and Debenhams failed to respond once again while Gap engaged positively for the first time after a recent decision to pay all suppliers in full.
  • Only three companies – Aldi Nord, Aldi Sud and Lidl have implemented a new policy not to ask factories for price reductions/discounts relative to comparable items with last season, although 65% of factory suppliers have reported demands of price cuts from brands

Thulsi Narayanasamy, Senior Labour Rights Lead, Business & Human Rights Resource Centre, said, “We are long past the time when a ‘we’ve not had time to prepare’ defence will wash. Over half the companies – 29 of 50 – recorded profits during the pandemic, yet just 3 out of 50 have implemented a pandemic policy which ensures vulnerable suppliers won’t be further squeezed on price during this time.

“At the start of the pandemic, fashion brands said they had ‘no option’ but to cancel orders and protect their bottom line, regardless of what that meant for 60 million vulnerable garment workers around the world. Since then, garment workers have lost up to $5.8billion in wages*, faced discriminatory layoffs in countries with no safety net, and factory suppliers are still being mercilessly squeezed by brands on prices, struggling to stay afloat or pay worker wages.

“Our findings show the fashion industry thinks it can continue with a ‘business-as-usual' approach, sticking to the same policies and practices they used before the pandemic. But what garment workers are facing is nothing short of complete upheaval and crisis. For workers already paid so little, to lose their jobs or not receive a full wage is the difference between feeding your family or not.

“The internal decisions brands make - how they negotiate prices of clothes, or whether they monitor what happens in factories - has a direct impact on the lives and livelihoods of the people that make our clothes. We know brands can do better because three out of the 50 we surveyed, including Lidl and Aldi, have stepped up and responded to the particular suffering during this pandemic.”

//ENDS

Contact

Media contact: Pippa Woolnough, Head of Communications, Business and Human Rights Resource Centre, +353 (0)858353757, [email protected]

Thulsi Narayanasamy, Senior Labour Right Lead, Business & Human Rights Resource Centre, +44 (0)7724580885, [email protected]

Notes to editor

Compare company actions on the COVID-19 Apparel Action Tracker

*$5.8 billion wage loss estimate source here

Methodology

In May 2020 Business & Human Rights Resource Centre (BHRRC) conducted a survey of 35 fashion brands and retailers (26 responded) regarding their response to the pandemic as it related to garment workers.

In November 2020 BHRRC undertook a follow-up survey with the original 35 companies and an additional 15, seeking responses from 50 companies (34 responded).

Of the brands that responded:

  • 20 brands indicated they had received reports of non-payment of full salaries for garment workers between March and October.
  • All 20 said that they were actively involved in resolving these payment disputes.
  • 25 indicated they are they are monitoring if garment workers are receiving all outstanding wages and legally mandated severance payments when they lose their jobs

However, while other brands did not discover any issues relating to non-payment of full salaries, this raises concerns about whether this is being adequately monitored.

  • Over a third (19) of brands have still made no public commitment to pay suppliers for all orders despite over eight months of public pressure
    • Includes brands like Topshop and Boohoo which failed to respond to the survey in May and November
    • Four companies have made a positive u-turn since the pandemic and decided to pay for all orders, including Primark, C&A, Gap and Levi Strauss
  • At least 11 companies have extended payment times during the pandemic.
    • By contrast, five brands (Sainsbury’s, John Lewis, Hermès, N Brown, Zalando) said they have shortened payment times for some suppliers to help cashflow during the crisis.