Dutch retailer C&A says it is now fully compensating apparel suppliers for the orders placed before the pandemic hit.
The retailer issued a statement saying it is ensuring 100% compensation for all orders previously put on hold and has been placing new orders despite the economic headwinds the fashion industry is facing across Europe.
C&A guarantees payment of all pre-corona orders that were in shipment, already produced or in production, at the original price and according to agreed payment terms. In addition, suppliers are compensated for all pre-corona orders for which production had not yet started, either financially or by placing new orders utilizing raw materials that had already been purchased.
It adds many suppliers are also supported through its supplier finance system in cooperation with the company’s partner bank.
“Actions speak louder than words. We have taken concrete actions to support our suppliers. We greatly value our suppliers with whom we have built strong and close relationships over many years. Our aim was to leave none of our suppliers alone during this global crisis,” said Martijn van der Zee, chief merchandise and sourcing officer from C&A.
According to Worker Rights Consortium, which at the end of May confirmed C&A had reinstated a large volume of its retroactively canceled orders, which it estimated to be valued at over US$1.5bn, it was still not paying for a significant amount of production.
Commenting on the group’s decision at the end of last week, the WRC said: “This is an important development, and, on the basis of this new commitment, we have placed C&A among those corporations that are now paying for orders in full. This decision by C&A will result in tens of millions of dollars in payments flowing to suppliers.”
However, it adds: “It is concerning to see that C&A’s public statement does not communicate honestly about the fact that they originally canceled orders outright with major impacts on suppliers and workers, and instead now says the orders were merely “put on hold”.
“The delay in achieving 100% payment—we are now seven months from the date of C&A’s original cancellation—has no doubt been costly to many suppliers. Given the ample resources available to its ownership, C&A’s original cancellations were never defensible nor is the slow pace at which C&A has rectified the problem.
“Late, however, is better than never, and C&A’s decision to set things right, even at this late juncture, will benefit many suppliers and workers.”