What is the status quo when it comes to finding out about order cancellation policies of Western fashion brands and retailers towards their suppliers? Which ones manage the crisis responsibly and honor obligations to suppliers and workers and which ones cancelled orders or demanded retroactive price reductions, for goods already in production or completed?
The status quo seems to vary from day to day and due to conflicting information is very blurry which makes it difficult to paint a clear picture about what is going on behind the scenes.
To make the current situation more transparent Worker Rights Consortium (WRC), an independent labor rights monitoring organization, in association with the Center for Global Workers’ Rights (CGWR) at Pennsylvania State University has provided the Covid-19 Tracker: This tracker lists both, companies that made a commitment to pay their orders in full and those who – so far – did not or only partially.
Here is the current listing published on WRC’s website:
Companies who have committed to pay in full for orders completed and in production:
- Inditex (Zara)
- Lululemon Athletica
- Marks & Spencer
- PVH (Calvin Klein, Tommy Hilfiger)
- Under Armour
- VF Corp. (JanSport, The North Face, Vans, Timberland)
Companies who have made no commitment to pay in full for orders completed and in production:
- Arcadia (Topshop)
- Edinburgh Woolen Mill (Bonmarché, Peacocks)
- Gap (Old Navy, Athleta, Banana Republic)
- Levi Strauss & Co.
- Li & Fung/Global Brands Group
- Ross Stores
- The Children’s Place
- Urban Outfitters (Anthropologie)
- Walmart (Asda)
According to WRC’s tracking standards “brands listed as having made a commitment to pay in full have met the following criteria, with respect to all orders placed (and on which fabric was cut) prior to the inception of the crisis:
- The brand is paying the originally agreed price for all in production, finished, and shipped orders, without any request for discounts or rebates;
- The brand is not canceling orders, except with full compensation to suppliers;
- The brand is not delaying shipping dates, or, if there are any delays imposed, they are small in scale and length and the brand is providing reasonable accommodation to affected suppliers; and
- If the brand is delaying any payments relative to agreed terms, the brand is providing affected suppliers with access to low-cost financing, so that suppliers’ cash flow is unaffected.
As sources WRC uses public statements by the corporation (including statements reported by credible news sources), direct correspondence with the WRC and/or CGWR, information provided by country-level associations of suppliers and information provided by individual suppliers.
WRC als indicates that, in association with CGWR, it is constantly monitoring and reporting on the positions of leading corporations.