New Center Research Report: "Leveraging Desperation: Apparel Brands' Purchasing Practices during Covid-19"

This research report is the latest is a series of reports by the Center on retailer and brand purchasing practices during the Covid-19 pandemic, and their impacts on workers and supplier factories. In this report, Center Director, Mark Anner, finds a large majority of suppliers surveyed reported that brands have demanded price dis- counts substantially larger than the year-over-year reductions they typically seek. As a result, over half reported that they are being forced to accept prices for orders that are below the cost of production. Suppliers also reported that many customers have imposed payment schedules that will require suppliers to wait additional weeks or months to be paid for their work, in an industry where payment terms are already severely skewed in favor of buyers. In sum, the survey results indicated that many brands and retailers are treating their suppliers’ increasing desperation as a source of bargaining leverage. The survey also showed that these financial pressures threaten the viability of many apparel suppliers and are likely to cause, or have already caused, large-scale dismissals of workers. Access report. See media coverage in Reuters.