The current global situation affected all the business trades very badly. The fashion department is also one of them. Asia’s garment workers are on a long wait after being rejected by the big fashion brands.
Many western retailers have annulled orders because of falling sales rates. Also, many of them demanded discounts on the deals. All the fashion stores are globally closed because of lockdown. Many of the suppliers are fired and are not paid, countries like Bangladesh and Cambodia are affected badly. According to analyzers, all the fashion brands did this with a union.
This worldwide Coronavirus pandemic is rolling back the labor’s rights. Asian garment workers are in great danger. According to fashion industry insiders, 60 million garment workers will suffer because of this situation, if prolonged. Zara-owner Inditex, H&M and Adidas, like big brands, announced that they would give full payments for all the orders.
But there are two contrary statements by the U.S. based monitoring groups and Workers Rights Consortium (WRC). One says that 27 world’s prominent retailers will pay for the completed as well as half-done orders fully. But others say there is no such commitment by any of the brands as mentioned above and retailers.
Many of the brands and retailers are aware of the economic loss and trying to alleviate the impact. But suppliers and manufacturers are in great fear and anxiety as they cannot discuss with Western buyers. One of the chief South Indian suppliers said, “As far as buyers are concerned, there has never been any real room for negotiations, who declined to be named to protect his business.”
After seeing public hullabaloo, some brands reconsidered the canceled orders, and some asked for discounts and delayed payments. Penelope Kyritsis, WRC’s assistant research director, confirmed this news. Moreover, she said, “Anything shy of obligating to fulfill their full orders is irresponsible to suppliers.” Orders of worth about 24$ billion are canceled so far. International Textile Manufacturers Federation is continuously estimating the economic loss.
In 2013’s disaster, about 1,135 garment workers were reported as dead in Bangladesh. After that, many steps were taken to improve labor conditions and rights.
Repute is in Jeopardy
McKinsey, a management consultant, warns the fashion industry about the crisis it is going to face as it was estimated a 30% fall in revenues for $2.5 trillion. Some garment brands and employer organizations are working to help manufacturers, yet many of the retailers refuse the initiative to pay the already placed orders.
Senior policy advisor Fiona Gooch, at advocacy group Traidcraft Exchange said, “We see brands that are prioritizing public relations wins over actually honoring their contracts. Retailers are using COVID-19 to dump more risk on suppliers or demand discounts. Some are acting like thugs, but any bad behavior now could stick on their reputation.”
Cancellations and Discounts
Many fashion brands are trying to cancel the orders by taking advantage of the COVID-19 disaster. Roberto Suárez Santos, IOE secretary-general, said that all the brands and buyers are under pressure. Flexible preparations have been put in place and are already working to some extent. No-one can have happy circumstances.