Garment Factories And Suppliers Around The World Lost $16.2 Billion In Orders

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Cgwr and WRC pointed out that the main sources of this report database include clothing suppliers and their trade associations.

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According to the report, since March, many large European and American fashion brands and companies have cancelled orders or refused to pay for orders placed before the epidemic, resulting in losses of 16.2 billion US dollars in global garment factories and suppliers from April to June. According to the report, suppliers from Bangladesh, Cambodia, Myanmar and other countries have to reduce their business scale or even close down directly. Because of this, millions of workers are either laid off directly or forced to shorten their working hours.

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According to the report, the epidemic has exposed the core imbalance of rights in the fashion industry, that is, suppliers in economically underdeveloped and even poor countries bear the initial production costs, while buyers pay only weeks or months after the factory delivers goods. During the period of the outbreak, the author pointed out that the original financial director of Nova could not support the situation of WRC through the unfair way of reporting by WRC itself

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Although suppliers and workers are in critical condition, some retailers choose to pay their shareholders Dividends with millions of dollars, the report said. In March, Kohl's, an American clothing retailer, distributed $109 million in dividends to shareholders just weeks after cancelling large orders from factories in countries such as Bangladesh and South Korea.

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The garment manufacturers association of Cambodia published an open letter in April calling on buyers to comply to protect the livelihoods of 750000 Cambodian garment industry workers. "All relevant stakeholders in the global clothing supply chain are overwhelmed by the epidemic, but compared with the buyers, the profits of manufacturers (factories) are meager and their pressure bearing capacity is weaker. In the end, the living environment for workers who live on the food and clothing line is even more severe. "

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The letter also pointed out that the total value of cancelled orders in Bangladesh was 2.5 billion pounds, with buyers mainly including Arcadia (the parent company of Topshop), Debenhams, Asda, peacocks, new look and sports direct.

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According to cgwr, more than one million Bangladeshi garment workers have been laid off or laid off because of cancellations or refusal to pay by brands and retailers. Although the local government has provided a total of US $500 million in relief funds to reduce the unemployment rate, many reports indicate that Bangladeshi workers have been without income for at least two months.

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According to a report in July, rubana Huq, President of the Bangladesh garment manufacturers and Exporters Association, said new orders were down about 45% from a year earlier. Bangladesh is currently the second largest producer in the world, with only half of its production capacity.

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Recruitment agencies in Vietnam, a major manufacturer of large sportswear brands such as Nike and Adidas, are also facing difficulties. Recruitment Consultant will tran told Reuters that he and his colleagues signed in only two hiring orders in April and may, compared with up to 10 orders per person. "So 80 to 90 percent of the demand for jobs has just popped out," he said

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Professor Mark anner, director of cgwr and lead author of the report, pointed out that the financial situation of clothing companies has been impacted by the epidemic, but they must face their due financial responsibilities. "Although being at the top of the supply chain allows (brands and retailers) to breach their contracts with suppliers in the face of a crisis, it is morally important to protect the weak The most fundamental is to ensure the rights and interests of workers at the bottom of the supply chain. "

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To hold brands and retailers accountable, WRC and cgwr launched an epidemic tracker in April to monitor companies' compliance with their contractual obligations. The parent company of British high street brand Topshop, such as Arcadia group, Walmart, Urban Outfitters and Mothercare, have not promised to pay the full amount for completed and in production orders.

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In addition, Scott Nova pointed out that under the influence of trade union organizations and media reports, gap, H & M, Zara and other brands and retailers have announced that they will pay orders in full. Previously, UNIQLO, a fast fashion giant in Japan, said it would pay as usual during the outbreak.

Center for global workers' rights (cgwr) and worker rights Consortium (WRC / workers' Rights Union) recently released an import data analysis report. Based on the previously unpublished import database, the two US organizations estimated the losses of global garment factories and suppliers from April to June this year.