Tenyearsago,BangladeshibusinessmanMostafizUddinfoundedhisownclothingfactory,andcooperateswithBritishfashionclothingbrandsBurtonandPeacocks.
Butnow,thebacklogofclothinginthefactoryhasreachedtheceiling.Theseinclude38,000pairsofBurtonjeansand15,000pairsofPeacockstrousers.
InaninterviewwiththeGuardian,YudinsaidthatwhentheUKannouncedthe”citylockdown” in March, he received bad news: major brands canceled orders and many orders had been completed. Pending shipment, and 80% of canceled orders are not compensated.
In order to produce the order, he has invested millions of dollars in advance to purchase raw materials and pay for labor. Now banks have stopped extending loans to Yudin, and the factory cannot pay wages. “My life has become a disaster movie.”
Yudin is not the only garment factory owner to experience disaster.
According to statistics from the Bangladesh Garment Manufacturing and Exporters Association, affected by the COVID-19 epidemic, at least 982 million garment exports from Bangladesh have been canceled or suspended, with a total value of US$3.18 billion and 2.28 million workers. Affected.
Garment manufacturing is a pillar industry for poverty alleviation in Bangladesh, creating jobs for 4 million people.
While major brands are canceling orders, analysts also predict that in the future, European and American companies may transfer clothing production from Southeast Asia to Turkey in order to shorten delivery times and reduce risks. , Mexico and other countries.
One million workers may lose their jobs
Since the 1995 World Trade Organization After the “Textile and Clothing Agreement” came into effect, Bangladesh’s finished garment exports can enjoy no quota restrictions in European countries and enjoy preferential quotas in the United States and Canada.
Since then, the country’s clothing manufacturing industry has developed rapidly. With the introduction of a series of new policies such as the U.S. Tariff Relief Assistance Act for Developing Countries, coupled with cheaper labor, Bangladesh became the world’s second largest clothing manufacturing country by 2011.
International brands such as GAP, Zara, H&M, and supermarkets such as Target and Wal-Mart all have garment cooperative factories in Bangladesh.
Today, the United States, Germany, the United Kingdom, Spain and France are the main markets for Bangladesh’s textile and clothing exports. Among them, Europe is the largest market, accounting for nearly 60% of the South Asian country’s textile and clothing exports.
In 2018, Bangladesh’s total exports were US$40.5 billion, of which US$34.1 billion came from finished garment exports, accounting for about 84% of total exports. The entire garment manufacturing industry contributes 16% of Bangladesh’s GDP.
Proportion of Bangladesh’s finished garment exports. Picture source: Statista
But Rubana Huq, chairman of the Bangladesh Garment Manufacturers and Exporters Association, revealed that since Europe and the United States have become the hardest-hit areas by the epidemic, Bangladeshi garment factories have suffered an average daily loss of 100 million. Dollar.
From March to June, 179 clothing factories closed across the country; more than half of the US$3.18 billion in canceled orders came from European countries. Although countries are currently starting to restart their economies, the situation of canceled and postponed orders by various brands has not improved.
Image source: Bangladesh Garment Manufacturing and Exporters Association
Except for cancellation In addition to orders, Rubana Huq pointed out that there are still a large number of buyers asking garment factories to provide discounts of 20% to 50%.
Statistics from the Bangladesh Garment Workers Union Center show that among the 2.28 million workers affected by the epidemic, at least 70,000 have lost their jobs.
It is predicted that the number of unemployed people will climb to 1 million by the end of this year. In major garment factories, more than 85% of workers are women, and the monthly income of ordinary workers is only about US$110.
In response to the impact of the epidemic, the Bangladesh government launched a US$600 million aid plan for the manufacturing industry, including clothing manufacturing. However, as the epidemic continues, industry insiders are worried that Bangladesh’s clothing manufacturing is facing a fatal blow.
In April this year, economists from the World Bank warned that the new coronavirus epidemic may push 50 million Bangladeshis back into poverty. On June 7, a report by the Center for Policy Dialogue, a think tank in Dhaka, further pointed out that the country’s poverty rate may regress to the 40% level of 15 years ago.
Similarly hit are textile and clothing exporting countries such as India, Vietnam, and Cambodia. According to statistics from the Wall Street Journal, about 250 garment factories in Cambodia have closed. Clothing, footwear and luggage account for 75% of Cambodia’s exports.
Clothing retail giant closed its doors
At the other end of the industry chain, Affected by the epidemic, various clothing brands were forced to close stores. American clothing retail giant Ascena and Brooks Brothers, a century-old store that has provided clothing for many U.S. presidents, even declared bankruptcy.
PVH Group, the parent company of Calvin Klein, announced to streamline its North American business and close 162 retail stores; more than 60% of GAP stores have been closed, and sales of all offline stores under the brand have dropped by more than 50%. ; In March, H&M sales dropped 46% and 3,778 stores were closed; Zara released the 2019The severity report also shows that 50% of the group’s stores worldwide are temporarily closed.
In addition to the decrease in customers in physical stores, the demand for fashion and formal wear has also shrunk significantly as more and more people begin to work from home.
A June survey by the US market research company NPD showed that 47% of customers only wear one set of clothes a day when working from home. Nearly a quarter of customers prefer to wear sportswear, pajamas and home clothes compared to formal wear such as shirts.
Achim Berg, a senior partner at McKinsey Consulting, predicted in an interview with the Wall Street Journal that 20% to 30% of the entire apparel industry chain will The company closed down due to the epidemic.
He also predicted that in the future, in order to shorten delivery times and be more flexible when placing orders, European clothing brands may move some production from the Far East to Turkey, Eastern Europe and North Africa, and North American brands will be moved to Mexico.
Rubana Huq also believes that the clothing manufacturing industry “will never go back to the past.” </p
