Ethical, Empathetic Approach to Suppliers by retailers

With a compassionate approach to suppliers, some global buyers opt against order cancellations

Amidst all the gloom-ridden Covid-19 dispatches, some fashion brands and retailers offer a ray of hope presenting themselves as #sustainable and #ethical brands during crisis. Their leadership, adhering to principles of ethics and empathy, has taken a bold decision of not cancelling orders, displaying concern for workers engaged with their suppliers in developing economies.

As the ongoing novel coronavirus pandemic pummelled the textile-garment industry across the world in a manner unprecedented in history, India’s Apparel Exports Promotion Council (AEPC) and the Buying Agents Association and the Bangladesh Garment Manufacturers and Exporters Association (BGMEA) have appealed to big international companies that source textile and apparel products from suppliers in the respective countries not to cancel export orders.

Six global fashion brands—Four European and two North American—have assured the exporters of receiving readymade garments already manufactured or in the process of being made, while not cancelling any prior work orders. Spanish clothing company Inditex, British multinational retailer Marks and Spencer, French retail company Kiabi, Swedish clothing retail company H&M and US retail companies PVH and Target informed their decision to accept the ready goods along with the goods in production. The decision was welcomed by exporters.

Fibre2Fashion sought a response from some major brands and retailers on the steps taken. In an emailed reply, #Target reiterated that it would work as a partner to come out of the crisis, had no intention of cancelling any order and will pay for orders already produced or in production. Additionally, in the short term, the company is making adjustments to its orders in categories like apparel and accessories where it is witnessing slow demand, the company said.

US fashion company #Ralph Lauren Corporation said it will settle payment for finished goods and goods already in production in accordance with its responsible purchasing practices.

#H&M assured its garment suppliers of taking shipment of goods that have already been manufactured. "We will stand by our commitments to our garment manufacturing suppliers by taking delivery of the already produced garments as well as goods in production," the company said in a statement without mentioning any particular supplier. "We will, of course, pay for these goods and we will do it under agreed payment terms. In addition, we will not negotiate prices on already placed orders," said H&M, adding that it will start placing orders again as soon as the situation allows.

Denmark-based #Bestseller has reached out to suppliers to spark a dialogue on current and future orders. “We will do our utmost to live up to our commitments and take delivery of garments already made and those in production. We are aware of our responsibility and we are in close dialogue with each of our suppliers on how to handle the current crisis. We have to get through this situation by collaboration and in partnerships with our suppliers. We want to support our suppliers and we are still placing orders for the coming seasons,” its global sourcing director #Michael W Schultze told #Fibre2Fashion.

American apparel and footwear company #VF Corporation, which owns 30 brands, is paying its suppliers for all orders already manufactured as per normal terms and conditions. It is honouring all valid purchase orders with a factory release date before June 1. In some cases, VF is delaying shipment dates to manage the flow of goods into the destination country, but is engaging with suppliers to find out if the delay will create a cash flow challenge at their end and if so, find potential solutions, the company said in a statement. “To help us manage this situation in partnership with our suppliers, we are not issuing new purchase orders until we have better visibility of consumer demand and production need,” it said.

To avoid order cancellation, Germany’s #Adidas is working with its partners to shift some of the orders to the second half of the year. “Our efforts include a commitment to pay for all orders completed, or in process,” the company told #Fibre2Fashion.

According to British multinational groceries and general merchandise retailer #Tesco, the majority of its orders will carry on as normal and it will continue to source from its suppliers on current payment terms. The company is committed to paying suppliers for orders that have been processed and is working with them to assess the wider impact of the pandemic. It is working with its brand, retail and union partners through the Action, Collaboration, Transformation (ACT) group to help protect workers in its garment supply chain.

French luxury goods conglomerate #LVMH has also announced its commitment to maintaining responsible and fair relationships with its partners and has ordered accelerated payments to suppliers. Further, several of its businesses have provided guidance and concrete support for the crisis by giving gels and masks to their suppliers.

These companies definitely deserve commendation for extending such support to their suppliers during this period of crisis with the hope that the business situation gets back to normal soon.

Fibre2Fashion News Desk (WE-DS)