UNIVERSITY PARK, Pa. - The Center for Global Workers Rights has published a new research report. This research report is the latest in 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 discounts 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. See media coverage in Reuters and access the report here.
October 22, 2020