Unpaid Billions: Apparel Order Volume and Prices Plummeted in Spring

To:WRC Affiliate Universities and Colleges
From:Scott Nova
Date:October 8, 2020
Re:New Report on Order Cancellations under Covid-19

Throughout the pandemic, the WRC has collaborated with Penn State’s Center for Global Workers’ Rights to understand the scale and impact of cancellations of apparel orders across the garment industry. A review of US government data on apparel imports—published this week by the WRC and Penn State—shows that, from April to June 2020, US brands and retailers took delivery on $9.7 billion less in garments than they did during the same period a year ago, a drop of 49 percent.

It is crucial to understand that, because of the time it takes to produce and ship an order of clothing, decisions by brands to reduce new orders cannot explain this precipitous drop. Most new orders placed after the crisis began did not begin to arrive at US ports until July. The vast bulk of the shortfall in US imports through June involved orders that brands had placed, and that suppliers had already produced or were in the process of producing, before the crisis began.

These billions of dollars in retroactive cancellations translates into suppliers dramatically reducing operations, suspending operations, or even going out of business. In the process, millions of workers faced reduced hours of work and thus reduced income, temporary suspension of work, or job termination.

The impact of these retroactive cancellations on suppliers and workers would have been much worse without efforts by the WRC and many other groups to urge companies to pay for their orders. Six months after we launched our brand tracker, with only six commitments from apparel brands and retailers to pay in full for orders completed and in production, another 15 companies have now made the same commitment. The latest to do so is Primark, which sources from dozens of collegiate factories.  

For news coverage of our research findings, please see today’s article in The Guardian.

As always, please let us know if you have any questions or would like to discuss this.