Blog: Beth WrightIndustry efforts to support garment factories & workers through Covid-19

Beth Wright | 27 April 2020

Apparel brands and retailers – including Adidas, C&A, H&M Group, Inditex, M&S and Primark – have joined employer organisations, unions and the International Labour Organization (ILO) to push for emergency funding to support garment factories and workers through the Covid-19 pandemic.

Textile, apparel, footwear and travel goods trade associations from around the globe are also adding to calls for governments to address the liquidity squeeze caused by Covid-19 across the supply chain.

And a coalition of labour rights groups representing around 2,000 apparel brands and retailers has separately set out its priorities to protect garment workers during the crisis – including safeguarding worker income and health, and future-proofing supply chains.

Covid-19 has placed severe strain upon the apparel industry supply chain, with garment manufacturers and related ancillary industries feeling the financial effects of the global collapse in clothing retail. The crisis has also thrown into sharp focus the inadequacies of the existing system of supplier payment terms.

India's apparel industry stands to lose shipments worth more than US$3bn due to order cancellations and delays during the pandemic, according to a survey of garment exporters across the country.

Representatives from the Korean textile and apparel industry are calling on US department store retailer Kohl's to reconsider its recent decision to unilaterally cancel orders – which it says puts at risk the livelihoods of nearly 200,000 workers around the world.

The Walmart-owned Asda supermarket chain, meanwhile, says it will continue to honour commitments to suppliers of its George clothing range, even though it is reducing payments for finished products.

UK retail sales slumped to new record lows in March, official data shows, with the volume of sales at clothing and footwear stores down a whopping 34.8% on the previous month.

Men's suits and formalwear specialist Moss Bros says the firm that had committed to a takeover of the company in a GBP22.6m (US$27.9m) deal last month is planning on pulling the offer.

While a similar move in the US sees Sycamore Partners, the private equity firm due to take a majority stake in L Brand's lingerie unit Victoria's Secret, looking to back out of the deal – news that saw the company's shares sink 15% last week.

Meanwhile, US department store retailer JCPenney Company is understood to be in advanced talks with lenders for an emergency loan that would fund its operations during a court-supervised bankruptcy.

One retailer well-placed to weather the retail storm caused by the Covid-19 pandemic is Boohoo, which has reported a double-digit rise in both earnings and sales for the full financial year and cited improved year-on-year group sales growth during April. 

Primark-owner Associated British Foods (ABF), meanwhile, has written down the value of its clothing stock by GBP284m (US$349.3m) as the fashion retailer has gone from making sales of GBP650m each month to nothing following the closure of all stores in March amid the Covid-19 pandemic.

Primark's dominance threatened by Covid-19

Meanwhile, with Covid-19 putting a stop to all non-essential travel, global supply chains are being put to the test as brands and retailers have to rethink how they work, how they communicate with their manufacturers on placing orders and product design, and with business associates globally. Technology is now taking a front seat and software companies are stepping in to help bridge the gap.

Seven years on from Bangladesh's Rana Plaza factory collapse, a worker rights group warns the pandemic is undermining ongoing struggles in social protection, living wages, freedom to organise and factory safety.

Research suggests that while there has been progress in factory safety since Rana Plaza, there have also been deteriorations in labour rights and the abuse of female ready-made garment (RMG) factory workers. We explore how brands and retailers can ensure workers in factories overseas are being treated fairly – and how predictive analytics can help manage social and labour compliance.

Elsewhere, on the 50th anniversary of World Earth Day, Ken Burton, executive director of the new US Cotton Trust Protocol, explains why it is so important that sustainability activity is not left behind as companies are impacted by coronavirus.

And the Global Legal Action Network (GLAN) and the World Uyghur Congress (WUC) is urging the UK government to halt imports of products made with cotton produced through means of forced labour in China.

In other news, the US is postponing duty payments for goods importers for 90 days in a bid to help them navigate "significant financial hardship" as a result of the coronavirus outbreak, and a group of 65 diverse civil society organisations has set out its vision for the global textile, garments, leather, and footwear (TGLF) sector.

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