Blog: Michelle RussellConcerns mount as Covid-19 impacts supplier orders

Michelle Russell | 20 April 2020

The coronavirus (Covid-19) continued to dominate our news coverage last week as supplier orders continue to be cancelled, apparel sales continue to plummet, and industry jobs remain on the line.

Concern is mounting at the use of force majeure clauses in contracts to enable apparel brands and retailers to stop shipments and avoid paying for the goods they ordered. But as well as cancelling future orders, buyers are increasingly evoking the emergency provision to break their binding obligation to pay for orders already in production.

However, a new tracker aims to name and shame apparel and footwear brands and retailers who have made no commitment to pay their suppliers for orders that are in production or already completed during the coronavirus pandemic – as well as flagging those who are upholding their obligations.

Pondering the future of the apparel industry, we can take one path which points us toward a more promising future, or we can choose a second path that simply repeats the mistakes of the past.

New forecasts suggest cotton prices are unlikely to spike in the economic recovery that follows the current coronavirus crisis – but garment sourcing costs may see significant upward pressure.

In the UK, the government imposed lockdown has sent online clothes sales spiralling by 23.1% during March, the first month under which the UK has been lockdown. While in the US, retail sales saw their biggest monthly drop on record during March - with clothing stores seeing their largest decline.

Globally, Peru's textile and apparel industry is scrambling to save hundreds of thousands of jobs as the coronavirus lockdown, newly extended until 26 April, wreaks havoc on the industry. While Haiti plans to reopen its key textile industry this week.

In Cambodia, garment unions are proposing brands and manufacturers contribute 40% of the minimum wage for workers in factories that have suspended operations due to Covid-19. And Europe's major clothing retailers and brands have called upon the EU Commission to consider delaying the withdrawal of the Everything But Arms (EBA) trade benefits received by Cambodia.

With fashion supply chains around the world fracturing in the face of travel bans, factory shutdowns and remote working, tools such as 3D virtual design, fit and prototyping software are helping businesses to stay on track.

An analysis of H&M's weekly sales in China shows that recovery from the Covid-19 lockdown has been slow, painting a cautionary picture for other retailers post-pandemic. With no immediate bounceback, retailers must consider their store reopening schedule post isolation measures.

The fashion giant is one of a number of businesses teaming up with EU ministers and NGOs to back a new informal alliance launched in the European Parliament this week calling for a "green recovery" from the Covid-19 pandemic.

And clothing and textile industry and government officials within the Indian Ocean archipelago nation of Mauritius say they are hopeful that a trade deal will be struck with India this year.

In other news, the global fashion supply chain saw 66 fires in March; Gordon Brothers sell the Bench brand; Optitex has been acquired by FOG Software Group (FOG); and Allbirds is to label all of its products with a carbon footprint.

Until next time...

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