It comes with no surprise that the fashion apparel industry has changed drastically in light of the novel coronavirus (COVID-19).
- According to the latest statistics released by the U.S. Census Bureau, hit by COVID-19, the value of U.S. clothing and clothing accessories sales went down by 50.5% in March 2020, compared with a year earlier.
- According to a recent NPR news report, in Bangladesh, the world’s second-largest garment exporter, about one million garment workers have lost their jobs as a direct result of sourcing changes. An online survey of Bangladesh employers, administered between March 21 and March 25, 2020, indicates that 72.4% of furloughed workers have been sent home without pay, and 80.4% of dismissed workers have not received severance pay.
- A survey of 700 companies conducted by the International Textile Manufacturers Federation (ITMF) between 28 March and 6 April 2020 shows that companies in all regions of the world suffered significant numbers of cancellations and/or postponements of orders. Globally, current orders dropped by 31% on average. The severity of the decrease ranges from 20.0% in East Asia to 41% in South America.
- According to a newly created COVID-19 Tracker developed by the Worker Rights Consortium, it is concerning that many large-scale fashion brands and retailers are not paying their overseas manufacturers back for the materials the manufacturers have already paid for to start making garments.
Additionally, here is a list of well-known fashion brands that have announced to cut or cancel sourcing orders as of April 13, 2020:
- Primark has closed all its stores across Europe and the U.S. and asked all of its suppliers to stop production. However, the company has set up a fund to pay the wages of factory employees who worked on clothing orders that were canceled.
- Ross Stores has announced to cancel all merchandise orders through mid-June, 2020.
- Gap Inc. has decided to halt the shipments of their summer orders and the production of the fall products
- H&M has also canceled orders but told its suppliers it would honor the orders it already placed before the COVID-19.
Additional reading:
- COVID-19 and the textiles, clothing, leather and footwear industries (ILO, April 2020)
- Clothing makers in Asia give stark coronavirus warning (BBC news)
Compiled by Meera Kripalu (Honors student, Marketing and Fashion Merchandising double majors) and Dr. Sheng Lu
The discussion is closed for this post.
FASH455 Global Apparel & Textile Trade and Sourcing 
This post calls attention to very important issues in the fashion industry right now. I follow Fashion Revolution on Instagram because I appreciate their mission calling for greater transparency in the fashion industry. In a recent post, they also stated that more than 1 million garment workers in Bangladesh have either lost their jobs or been furloughed because of retailers canceling orders and refusing to pay for canceled shipments. Target, Inditex, PVH Corp, and H&M have all agreed to pay for their completed and in-production orders. Meanwhile, JCPenney, Walmart, Tesco, Primark, and many more are among the top buyer cancellations and holds in Bangladesh. These brands who are refusing to pay their factories are leaving workers without pay for work that may have already been done. It is important for these large brands to support their supply chain instead of abandoning them. Hopefully, larger brands will continue to follow the example of Target and the above brands and make a positive impact in the fashion industry.
I totally agree. I think that much of the focus and concentration is on major retailers, who have closed their brick-and-mortar stores and cancelled orders. There is not a lot of focus on the garment workers in developing countries like Bangladesh that are also effected by the closures of many of these businesses and operations. Before reading your post, I honestly did not even think about the affect on regions like that before. For them, the situation is much worse. The garment industry is the only source of hope for developing countries to succeed economically. While in already-developed countries like the United States, we have plenty of different industries that are considered “essential” and can still function during this time. From this perspective, we have to notice that the situation can be much worse for our country and that’s a reality that countries like Bangladesh are currently facing. I love that companies like Target are taking real initiative and this shows how they treat their garment factory workers.
Glad you agree! This really is a huge issue that needs to be paid attention to.
pleased to see you follow the issue closely and I agree totally. Similar to what you said, I really like a recent comment made by Edwin Keh, CEO of the Hong Kong Research Institute of Textiles and Apparel (HKRITA): “The tendency is to close the doors, turn off the lights and turn a blind eye to what’s happening. And I’m really cautioning companies not to do that, because those actions will be remembered much longer and they will cost a lot more than the little bit that we save by cancelling an order here or a programme there… This crisis reveals our character, it demonstrates those core principles we say we believe in… So don’t be remembered for cancelling orders or putting factories out of business or abandoning sustainability or abandoning social responsibility. Be remembered as companies and supply chains that did the right thing and acted with courage and conviction and demonstrated our beliefs and our values by our action in this critical time.”
https://www.just-style.com/interview/theres-no-playbook-for-navigating-a-pandemic-how-we-act-now-will-show-the-world-what-we-stand-for_id138508.aspx
Such a powerful quote, thank you for sharing! When I took Sustainable Business Model Innovation with Marsha Dickson, Edwin Keh spoke to our class via Zoom on multiple occasions and his lectures were very meaningful. Once during a presentation, he mentioned the fact that most consumer products are made in a “United Nations of third world countries.”I thought that was really compelling way to put it and makes us think about how the globalized nature of fashion manufacturing affects developing countries.
The fashion industry is being hit very hard by the emergence of the coronavirus. This article made me realize that even though American jobs and economic conditions are at a current low since 2008, this could be even more detrimental to developing countries like Bangladesh, who depend on the fashion industry as their main source of economic success. While there are many negative impacts from this pandemic, there are going to be many positive impacts as well. I think this pandemic is going to completely change how the fashion industry operates in the future. I think that this crisis is showing businesses and companies that the need to focus on community and humanization. Before this, many companies only cared to make profit and sales. Now companies are focusing on what they can do to help not only their customers and other businesses, but those on the frontlines of this virus as well. Recently, I read an article about on Harvard Business Review the HEART framework, which ensures that customer relationships outlast the virus. It provides different strategies such as humanizing your company, educating your consumers, assuring stability, revolutionizing the way consumers think about your business, and how they will tackle the future together. Overall, this allows for companies to really interact with their consumer and find different ways to cope during this time.
Well said. Here is the latest data I collected from UNComtrade: the economic growth of many developing countries relies heavily on making and exporting textile and apparel products. Notably, as much as 91.2% of Bangladesh’s exports in 2019 were textile and apparel products. We can observe similar patterns in Cambodia (61.3%), Haiti (89.2%), Sri Lanka (61.4%), and the least developed countries as a whole (58.8%).
While the COVID-19 pandemic is placing a lot of financial strain on retailers, it will be interesting to see how vendor relationships change as a result of order cancellations/postponements. H&M is still honoring orders placed before the disease escalated into a global crisis, but other retailers are pulling out of pre-established deals entirely for the coming seasons, as mentioned in the article. Both retailers and manufacturers are having to make difficult decisions and exercise leniency in lieu of the unprecedented situation, but the drastic measures being taken could result in severed ties and strained partnerships across the industry. Will vendors continue to work with brands that are making them eat materials costs and lay off factory workers? Will retailers starting to source in countries with production capabilities in order to continue rolling out new product, leaving some of their most reputable vendors behind? How will the global retail supply chain be effected as a result of these controversial actions when the economy starts to reboot?
excellent comments and questions! I may not have the answer to all your questions. However, I think it is a positive sign that many well-known fashion brands and retailers are trying their best to work with their suppliers to go through the current challenging time together. In fact, fashion brands and retailers have been working hard to build a strategic partnership with their vendors. The competition in the fashion industry today is supply-chain based. That being said, the industry still needs external support–especially from the government. Many small and medium-sized apparel companies are facing serious liquidity problems…International orgaizations are involved too: https://www.ilo.org/wcmsp5/groups/public/—dgreports/—dcomm/documents/briefingnote/wcms_742371.pdf
In this pandemic it is crazy how much the entire world is being affected. In the new’s and reading WWD I read a lot about what companies are furloughed their employees and hopefully by July things will kick back up again. But it is hard being reading that in Bangladesh one of the 2nd largest garment exporters that “72.4% of furloughed workers have been sent home without pay, and 80.4% of dismissed workers have not received severance pay”. Here in the USA we are hearing employees who are furloughed getting severance pay & collecting unemployment. It makes me wonder why even when these employees in Bangladesh who work for these large international brands can not receive something similar? Bangladesh has made so many different efforts to help working conditions for their employees but it seems like no matter what they do it is never enough.It makes me wonder what is really happening behind the scenes in Bangladesh?
Wow, I was very unaware of the fact that many of these Bangladeshi garment workers are not getting severance pay. While many people in the United States are currently worried that they will not have even money to get by, I could not even imagine what it is like for workers in Bangladesh. These garment workers put in the most time and effort into producing garments that are worn by people all over the world, yet the way they are treated by garment factory owners is beyond ridiculous. They should be treated with much more respect due to all the hard work they constantly put in without getting a lot of pay. I totally agree that there could be more happening behind the scenes that has not come to people’s attention.
I just did some more research on the top of Bangladeshi garment workers because I was genuinely interested and recently, there has been a lot of controversy amid the coronavirus pandemic. On April 26 of 2020, millions of textile workers protested demanding higher wages amid the nationwide lockdown to contain the virus. Many workers have received no wages within the last two months, leaving many to starve. These workers stated that they will continue to protest until their demands are met despite the crisis.
COVID-19 has left a substantial impact on the world and especially in the fashion industry. This pandemic will forever change the way life functions. Reading the article and living in the U.S. during this time has truly made me realize my privilege. It is so hard to learn that, “many large-scale fashion brands and retailers are not paying their overseas manufacturers back for the materials the manufacturers have already paid for to start making garments.” It is unfair and grim that these large retailers are not going to pay for the materials paid for to make their orders. In the U.S., employees working for these large retailers are getting some form of payment, may it be a severance pay or collecting unemployment. So why is it that the manufacturers in Bangladesh, for instance, who also work for these brands, are not receiving payment for goods sought out for these companies?
The COVID-19 pandemic has certainly impacted the worldwide apparel sector. The blog post mentioned that retailers have suffered significant numbers of cancellations and/or postponements of orders. And, in my personal online retail experience over these past few weeks I have certainly seen this. Many of my favorite e-commerce brands have limited if any new arrivals, I have seen very minimal spring color ways and clothing items. Also, the shipping times have been much more longer than usual in lieu of the virus. I wonder how things will be when this worldwide lockdown is all said and done. Will the fashion industry ever be the same as it was? Will fashion brands be able to back from this?.. I certainly hope so
thank you so much for sharing this! very true. No matter how, I think as a buyer-driven industry, the future of the fashion retail business depends on the health of the national economy and consumers’ demand. As long as the demand rebounds, everything else will gradually go back to normal.
The COVID-19 pandemic has left a dramatic impact on the world and the T&A industry. I believe this pandemic will forever change the way we live life in the US but reading this article made me realize how good we actually have it here. It was rough reading that in Bangladesh, one of the 2nd largest garment exporters in the world that an abundance of furloughed workers have been sent home without pay and also that dismissed workers have not received their severance pay. Living in the US during these times at least we have employees who are collecting unemployment. I am very interested to see how this pandemic forever changes our financial situation in the world and especially in the fashion industry. Many manufacturers and retailers are having to make extremely unprecedented decisions for their businesses because of COVID-19. As these drastic decisions are being made and played out I wonder how the relationship between these two very important players in the industry will pan out. If brands are making their vendors eat costs left and right I wonder what will happen to their relationship after this situation we are in is over…My main question is will the fashion and apparel industry ever get back to the way things were?
This article shed light on something im sure a lot of us didn’t know was happening across the globe. Reading that Bangladesh such an important garment exporter in the industry was not properly taking care of their garment workers during the COVID-19 crisis was upsetting. Many have been sent home from working with no pay and some even fired with no severance pay. While this was unsettling and sad to find out I think it gave me a new sense of pride knowing that here in the U.S employees are at least able to collect unemployment. This pandemic has put many countries around the world in tough financial situations, the fashion industry is being hit especially hard as retailers can only rely on e-commerce right now and some don’t even have that option. Also Manufactures are having to make tough decisions like those made in Bangladesh and who knows what the repercussions of all of this will have on the industry in the long run. It is a very sensitive situation that w all have to keep our eyes on .
The COVID-19 has certainly left irreversible impacts to the whole world. It is upsetting to see that Bangladesh being one of the major garment exporter chose to leave their employees alone in this tough time without even trying to give assistance to them. However, the pandemic made all of us realize that we are actually living in a great country, having proper law and right to protect us from being exploited. While this is a tough time we have to hang in there and fight against it, there are also problems occurred during this time and are waiting to be deal with after the pandemic.
COVID-19 has brought serious consequences to the world fashion industry. The international brand may be the one who especially suffered the most as its supply chain and selling chain has temporarily closed and the resuming time is still uncertain. On the other hand, the fashion factories workers are facing the crisis of living as some fashion companies chose to stop their orders. It is sad that most Bangladesh workers have lost their job as factories are closed. Besides the danger of COVID-19, workers have to face another serious problem – living. It raises the question of rather workers are well paid for their job and if the wages are reasonable. I hope the fashion industry can pay more attention to workers’ human rights.
Covid-19 is detrimental to the fashion industry. It slows/prevents productions, communication is difficult, it is impossible for retailers to predict what will happen, and consumer spending is down a significant amount. As the article mentioned, retailers have already began to delay shipping and cancel their orders. Some retailers like J Crew and Neiman Marcus have filed for bankruptcy already. They have to do whatever they can to survive financially in this harsh economic environment. Hopefully as the virus gets better, the status of the fashion industry will improve. Today I saw that Free People is beginning to open some of their locations that haven’t been hit that hard by Covid-19, so that is a major start.
Because of COVID-19, not only the fashion industry, but countless other industries are being affected. I am really interested in seeing how the fashion industry is going to rebuild once this whole thing blows over. Since many retailers have had to cancel many of their orders, will they have to rethink the fashion calendar as a whole? I think it’s going to be so interesting to see what different retailers are going to do once they are able to start up production again. Additionally, it’s nice to see retailers making statements about how they are still paying their factory workers for the work they had already completed even though they may not be receiving these orders. This shows this social responsibility that many companies have that we have talked about in many of my sustainability courses I have took.
One thing about this blog post that really stuck out to me was when it talked about how the pandemic has affected Bangladesh. About 1 million garment workers have lost their jobs so far, which is very significant because Bangladesh is the world’s 2nd largest exporter. In March, 72.3% of furloughed workers were sent home without pay and 80.4% of dismissed workers have not received severance pay. This stuck out to me right away because we recently did a case study on Bangladesh and the tragedy of Rana Plaza. The people living in this country are faced with hardship after hardship. In this course, we learned a lot about developing countries and how they rely very heavily on their textile and apparel sectors for economic growth. It is very heartbreaking to watch this pandemic unfold and to know that it will hit the weakest the hardest is heartbreaking as well. I really hope that retailers, especially socially responsible ones, keep this in mind as they figure out where to go next during this global crisis.
I cannot think of any industry that is not suffering at this time but to me industry that is suffering the most is the fashion industry. What keeps a lot of the fashion industry going in the US is the shoppers need to stay on trend. With CO-VID19 it is leading people not needing to shop or choosing to not shop because they are not making the same amount of money. This is clear by the report that ,”the value of U.S. clothing and clothing accessories sales went down by 50.5% in March 2020, compared with a year earlier.”. This is causing many producers of clothing to suffer. Bangladesh is still categorized by many as a “third world” country and while it is the 2nd largest apparel producer after China it seems further behind economic growth wise. Bangladesh has had to furlough 72.4% workers. These people have been sent home without pay, and 80.4% of dismissed workers have not received severance pay. This combined with lack of demand for goods can lead to a growing unemployment rate as well as increased poverty, that is something that could take a country like Bangladesh years to fully recover from.
It is clear that COVID-19 has impacted the world as a whole, in all lines of work. Everyone is living in such a stressful time period, which has forced people to act and live differently. I found it interesting that certain fashion brands are not paying their overseas manufacturers, what will happen to the garments? Will the manufacturers hold them until they are paid back? It will be very interesting to see how the manufacturers act when everything goes back to normal. Some may not work with some of the fashion brands that have not paid them yet, because they were unfair in such a desperate time. Some fashion brands have acted selfishly, which shows that they do not follow their own company guidelines when times are tough. I truly wonder how long it will take for certain fashion brands such as: Primark, Ross Stores, Gap inc., and H&M, to be able to have their garments produced and back into the stores once all this is over.
The COVID-19 virus has truly affected every country both direct and indirectly. I believe this article is extremely important in helping to recognize the other countries that are suffering from this pandemic, that the general news does not touch upon. More specifically, people in developing countries like Bangladesh are dealing with the worst of it, as their jobs barely help them to comfortably survive in the first place. Now that garment district workers are being laid off, these people have no source of income to feed themselves or their families. While I feel horrible for the people that are struggling on the other side of the world, it definitely makes me happy to know that our government is working to provide furlough and other methods of compensation for struggling families in the U.S. It is implicit that these Asian governments begins to pay more attention to their struggling citizens.
With a global pandemic occurring, there is no doubt that every industry has been impacted. It saddens me to see the fashion industry amongst one of the industries hit hardest. The numbers regarding Bangladesh stated in the article were shocking: 72.4% of furloughed workers have been sent home without pay, and 80.4% of dismissed workers have not received severance pay. In an LDC like Bangladesh, it is worrisome how they are possibly going to rebound from this. As the world’s second-largest garment exporter, how will this impact the sourcing and trade when the time comes that the COVID-19 pandemic is over? Will these effects be everlasting?
COVID-19 is causing a lot of harm currently. Fashion companies are trying to take the best steps to ensure survival in these uncertain times. It is truly unfortunate that in Bangladesh 72.4% of furloughed workers were sent home without pay and 80.4% of dismissed workers have not received severance pay. These being statistics from late March, I can only imagine the increase in percentages of these numbers in May.
As the article stated, the value of clothing and accessories sales have gone down significantly as more people simply are finding these items to be non-essential in these current times. I recently saw that some retail brands are planning to open some of its stores in the next few weeks while ensuring healthy and safe measures. I wonder why brands are opening some store locations so soon with the virus still spreading. Are these brands doing so solely from a business aspect to stay afloat, or it is because these brands are thinking of their consumers and those who truly miss shopping in their stores?