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11 Jun 2020

Mei-Ling McNamara, The Guardian

Kohl’s: clothing retailer pays out $109m in dividends after having cancelled $150m in orders, leaving suppliers and garment workers in Bangladesh and S.Korea to face the fallout of Covid-19

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“Anger at huge shareholder payout as US chain Kohl’s cancels $150m in orders”, 10 June 2020

Kohl’s … cancelled millions of dollars’ worth of existing orders from Bangladeshi and Korean garment factories just weeks before paying out $109m (£85m) in dividends to shareholders…

The company cancelled orders of clothing worth approximately $100m from Korea and $50m from Bangaldeshi factories after the Covid-19 pandemic struck, and refused petitions from suppliers asking … to renegotiate payments. 

The clothing companies say that Kohl’s … acted unilaterally without consulting or negotiating with suppliers ... Kohl’s also furloughed 85,000 US staff and shuttered its 1,159 stores.

Kohl’s did not respond to the Guardian’s request for comment.

Rubana Huq, president of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA), said that similar actions by brands has already led to thousands of garment workers losing their jobs and factories closing. 

In a letter to Kohl’s … the Korean Federation of Textile Industries has also appealed to Kohl’s to honour its existing agreement … and not use “force majeure” clauses in contracts to avoid paying for clothing already made and ready to ship.

Scott Nova from the Worker Rights Consortium (WRC), said that Kohl’s actions were tantamount to exploitation and exposed the huge power imbalance in the global garment supply chain