Suppliers and workers in some of the poorest countries have lost months of revenue, as western clothing brands refuse to buy $16 billion USD worth of goods due to the pandemic.
US and European fashion companies have rejected over $16 billion USD worth of exported clothing and goods since the pandemic hit earlier this year, according to newly published import data from the Center for Global Workersβ Rights and the Worker Rights Consortium.
Not only does this mean that suppliers in countries like Cambodia, Myanmar, and Bangladesh have had to seriously cut back operations or close them entirely, but it also exposes the glaring economic imbalance between western nations and the rest of the world with regards to the fashion industry.
The huge financial losses were a result of cancelled orders or companies refusing to pay for clothing that had been requested pre-Covid. Lockdown measures and a total shutdown of retail stores earlier this year has resulted in huge drops in profits across the board. The UK is expected to lose 25% of all business this year, while US apparel sales could fall by half by the end of 2020.
A sudden shrink in sales means significantly less demand for new items, which in turn causes suppliers to scramble and eventually dissipate. The current system for most clothing imports in the US and Europe puts all of the pressure on poorer countries to pay for employers, factories, and materials, and buyers usually donβt have to pay anything until products ship months later.
Itβs basically a two way commitment, except wealthier nations buying in bulk donβt have to honour contracts until the items are made and transported. Dropping out at the last minute – which seems to have happened en masse this year – causes a huge amount of damage to the most economically vulnerable nations.
Even more frustratingly, it seems that some top clothing brands such as Kohlβs have been paying out huge dividends to shareholders while cancelling existing orders from Bangladeshi and Korean garment factories. The resulting fallout has been eye-wateringly extreme. Over a million garment workers have been furloughed or fired as a result of cancelled and refused orders, and many have stated theyβve not received pay in two months.
Other big labels are guilty of not honouring contracts and fulfilling previously requested orders outside of just Kohlβs. According to The Guardian, Topshop, Walmart, Urban Outfitters, and Mothercare have all rejected big bulk purchases that are either finished or in production.
The pandemic has exposed a systematic imbalance that isnβt sustainable for the long-term future, especially as lockdowns and international disease emergencies are likely to become even more common. We cannot continue to allow the fashion industry to operate in a way that leaves the poorest out of work and prioritises the pockets of rich investors – huge brands and companies should be forced to honour purchasing commitments, even if they suddenly decide they donβt need them several months down the line.
Failing that, more needs to be done to prepare for outbreaks like COVID-19. Itβs unethical for the wealthiest western companies to be in complete control of the supply chain when theyβre ultimately most well equipped to deal with economic fallout. Renewed insurance policies or new legal binding contracts could help to secure finances for suppliers without them suddenly falling short of pay with no warning.
Consumers also need to demand more from brands and push them to honour their βsustainably sourced and producedβ marketing slogans that are always nonchalantly touted everywhere. If fashion companies truly cared about their employers and products they would prioritise helping the poorest of their suppliers before investors.
The good news is that not all big companies are ignoring the financially vulnerable. According to the Workers Rights Consortium, labels such as GAP, H&M, and Zara have all now reversed their previous decisions and are fulfilling previous order contracts. Keep in mind though that they were driven by outside pressure from worker organisations and media outlets – it didnβt come off their own backs.
So, itβs time to push for all fashion labels to help out supply workers and demand some serious change. Click here to visit the Labour Behind The Label website and do your part to help support the workers making your clothes.
I’m Charlie (He/Him), the Editor In Chief at Thred. I studied English at the University of Birmingham and as a music and gaming enthusiast, I’m a nerd for pop culture. You can find me curating playlists, designing article headline images, and sipping cider on a Thursday. Follow me on Twitter, LinkedIn and drop me some ideas/feedback via email.
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