Coronavirus affects garment manufacturers in Bangladesh

The coronavirus outbreak has affected virtually every aspect of the economy, including the fashion industry, which has struggled to figure out how to pay for supply orders from apparel manufacturers.

Garment makers in Bangladesh are being laid off in large numbers after $3 billion in orders were canceled or put on hold, The Associated Press reports.

Some retailers have agreed to pay what they owe, but many have not.

The Bangladesh Garment Manufacturers and Exporters Association (BGMEA) released the data on Monday, March 30 on orders already placed or in progress. Bangladesh is the world’s second largest clothing exporter after China.

Canceled orders number in the tens of millions and include Inditex, C&A, Primark and Marks & Spencer. Labor groups and manufacturers across the country have called on major retailers to meet their commitments.

Most businesses in Bangladesh were recently told to close during the pandemic, but the export sector has been feeling the effects for a few weeks now.

About $1.8 billion in orders are pending and another $1.4 billion have been cancelled. Orders from April to December alone cost the industry $1.7 billion.

Clothing company H&M said it would wait for new orders, but would pay suppliers (and take delivery) of orders already placed or in production.

“This is in line with our responsible sourcing practices, and not just in Bangladesh, but in all countries of production,” the company said.

The company that owns Calvin Klein and Tommy Hilfiger, PVH, said it has been asking suppliers to release pending invoices since March 18, and that subsequent invoices will be processed gradually.

If companies paid for orders already placed or for those not yet shipped, it would help factories stay solvent.

“PVH and H&M are doing the right thing, unlike the long list of brands that refuse to pay for the goods workers have already made for them,” said Scott Nova, executive director of the Worker Rights Consortium.

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