Garment industry succumbs as brands cancel orders

April 1, 2020 written by

The COVID-19 pandemic adversely affects the garment industry as fashion brands shut down their respective stores. According to Rajesh Bheda, Managing Director, Rajesh Bheda Consulting, the economic impact will be too mind boggling.

“The garment industry is likely to be one of the worst sufferers as most global fashion giants have downed shutters in major consumption market of the US and Europe. Many have suspended deliveries of the ready goods waiting at ports and in factories across the globe, majority of them situated in Asia,” added Bheda.

The pandemic is likely to affect millions of workers in supply countries all over the world. The effect might be more devastating for millions of garment workers and businesses working on thin margins. As per the estimation made by BGMEA, till March 25, shipments worth 2.58 billion have already been cancelled or suspended involving 936 factories and 1.92 million workers. In India, all the factories in Tiruppur have been shut down since March 22 whereas across the country, factories have been shut with national lockdown from March 25.

Sarah Krasley, CEO, Shimmy Technologies expresses that this behavior on part of brands is totally unconscionable. “Millions of factory workers are in serious jeopardy as brands have not paid their suppliers for work already done. It is deeply saddening how quickly they have turned their backs on their very partners who are critical to their success,” added Krasley.

Meanwhile, India’s textile minister Smriti Irani has appealed to factory owners not to cancel shipments. She assured that seven million craft persons spread across craft clusters in India, 20,000 exporters who are part of the Export Promotion Council for Handicrafts (EPCH) and Carpet Export Promotion Council (CEPC) will work with them to ensure that possible measures are taken to stimulate growth in future.

Dr Rubana Huq, President, BGMEA also appealed to buyers not to abandon. “With the fate of our industry and workers being uncertain, it’s time to act in compassionate manner. However, with brands canceling orders and deferring shipments, we have no idea what tomorrow holds,” added Dr Rubana.

Expressing his views, Mayank Jain, Founder, Moon Technovision said, “In times like these, brands should act like a Big Brother. They should stand by their commitments as their orders are already in process. This is the only partnerships work. It’s time for big brands/retailers all around the world to protect the industry. Brands can hold their orders instead of cancelling them or accept procurement liability in case cancellation is unavoidable due to fashion/season change.”

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