Since the outbreak of the new coronavirus pneumonia epidemic, major European and American fashion brands have unilaterally canceled orders and refused to pay overseas suppliers, with the total price reaching more than 16 billion US dollars.
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Video: Orders disappeared, US$16 billion in payments refused,
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My Life turned into a disaster movie in one day
Mostafiz Yudin is the founder of a clothing production and foreign trade company in Bangladesh and is well-known in the local industry. Most of his customers are European and American clothing brands. In March this year, Yuding suddenly received an email from the British customer Arcadia, saying that due to the impact of the epidemic, all orders would be canceled and goods from Yuding’s factory would no longer be accepted.
Bangladeshi clothing manufacturer Yudin: We should be regarded as a link in the value chain, but the fact is that (customers) only send goods to long-term partners. I received an email and said the order was canceled and they no longer wanted my goods. (Although) I have bought the raw materials, they just don’t want them. How can (customers) do this.
In order to make Arcadia’s new clothing, Yudin spent more than 1 million US dollars to purchase raw materials. The brand’s total value in his factory is approximately 2.44 million USD goods. Today, these goods, which were supposed to be sent to the UK, are filling Yudin’s warehouse.
Acadia is not the only one canceling orders A brand. Yuding said that since March, 80% of the factory’s foreign trade orders have been cancelled, without any further explanation or compensation from customers. He posted his experience on social networking sites and attracted the attention of major media. Under pressure from public opinion, Arcadia Group responded.
In a letter to suppliers, Arcadia Group said that the new crown pneumonia epidemic was a “force majeure” and therefore the cancellation of the order was in line with the terms of the contract. They currently only accept goods that have left the port and are in transit as of March 17, but they can only pay 30% off the payment at a preferential price. All other orders, including garments that have been made but not yet shipped, will be cancelled. The reason is that after the season, customers will no longer buy spring clothing. Since stores are still closed, warehouses can no longer receive new inventory. A spokesman for the company also said they were under no obligation to reimburse Yudin for the cost of purchasing raw materials.
But another set of data is equally astonishing. According to the British “Guardian” report, despite the impact of the epidemic on revenue, some brands and retailers still spend huge sums of money to distribute dividends to shareholders. Kohl’s, one of the largest clothing retailers in the United States, paid a dividend of $109 million to shareholders after canceling a large number of orders from Bangladesh, South Korea and other places.
The owner of an Indian garment factory whose foreign trade orders were canceled once said in an interview with the media: “If Our workers will not die from the new coronavirus, but will also die from hunger.”
In the era of globalization, many brands have transferred their manufacturing processes to low-labor costs. country to expand profits. But when a crisis strikes, it is difficult to expect them to be able to weather the difficulties with businesses and workers in these countries. In this global epidemic that has lasted for nearly a year, the workers in developing countries at the bottom of the industrial chain are often the ones who really bear the brunt of the disaster.
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