Bangladesh garment makers say $3B in orders lost to virus

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Bangladesh garment manufacturers say fashion retailers have cancelled or placed on hold more than $3 billion in orders due to the coronavirus outbreak, though a few have decided to pay anyway.

The info from the Bangladesh Garment Manufacturers and Exporters Association released Monday reflected both orders already made or in the works and planned orders from the united states, which may be the world's second largest exporter of clothing after China.

The cancelled orders, according to reports to the BGMEA from manufacturers, included tens of millions in purchases from many big buyers, including European buyers C&A and Inditex, Primark of Ireland and Britain's Marks & Spencer.

Bangladesh manufacturers and labor groups have already been attractive to big retailers to honor their commitments to suppliers.

Bangladesh is just starting to feel the direct impact of the pandemic and its own government has ordered a turn off of most businesses to help own it. But shocks to the country's export markets have been cascading into its economy for weeks.

A survey of factory owners in Bangladesh released Friday showed millions of Bangladesh factory personnel being sent home without the wages or severance pay they are owed.

The BGMEA reported that $1.8 billion in orders have been put on hold and another $1.4 billion have already been cancelled. Cancellations of planned orders, for April-December, amounted to practically $1.7 billion, it said. The figures are conservative because they exclude orders that could go to multiple buyers.

The brand new data were incorporated into a report by Pennsylvania State University's Center for Global Workers' Rights and the Worker Rights Consortium, a Washington, D.C.-based labor rights organization.

Sweden's H&M has said it had been pausing new orders and reevaluating plans but can pay suppliers and take delivery of orders already under production or already made, according to terms already agreed on.

“This is relative to our responsible purchasing practices, and not just the case in Bangladesh, but in all production countries," the business said in a statement.

PVH, which owns the Calvin Klein, Tommy Hilfiger and Heritage brands, has told suppliers it really is releasing invoices that were placed on hold since March 18. Later invoices will slowly but surely be processed.
 
The commitment for orders already under production or finished products not yet shipped would enable factory owners to get financing to tide them over, said a letter to suppliers seen by The Associated Press.

“PVH and H&M are doing the proper thing, in contrast to the long set of brands refusing to cover goods workers have already designed for them," said Scott Nova, executive director of the Worker Rights Consortium.

U.K. retailer Tesco, among the retailers mentioned in the latest data, said in a statement that it was buying from the majority of its suppliers and dealing with them to understand the way the outbreak has effects on them.

Marks & Spencer said it had been trying to defer orders and carry forward its inventory. “In these unprecedented times, as a responsible retailer we will continue steadily to do all we are able to to aid our partners and suppliers," it said within an emailed statement.

Big Western brands attended under heavy pressure to boost conditions in factories after huge fires and other disasters killed a huge selection of workers.

The store closures and other disruptions from the virus outbreak are straining a fragile supply chain in which big buyers have already been squeezing their suppliers for a long time.

More than 1 million of the more than 4 million garment personnel in Bangladesh curently have lost their jobs or have already been furloughed as a result of order cancellations and the failure of buyers to cover canceled shipments.
Source: https://www.wfmz.com

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