The empty Dutch shopping streets have worldwide consequences for the clothing industry. Factories in clothing producing countries have come to a standstill, some clothing brands are not fulfilling the contracts with their factories.
Organizations such as the Clean Clothes Campaign, Fair Wear and Modint call for international solidarity and speak out against brands that cancel orders: “We should not put the problems from here on the plates of production countries.”
The main reason for this problem is that much less clothes are bought. InRetail, the industry association of non-food retailers, reports that on March 29, two-thirds of their members had already seen sales fall between 70 and 100 percent. “The shopping experience is very different at the moment and people are having financial worries, which means they buy less clothes. That hurts our industry,” said a spokesperson.
The online sales of clothes have been steadily increasing in recent years, but according to Wijnand Jongen of Thuiswinkel.org, the growth is now leveling off: “Sales of replacement products such as socks and underpants continue, sales of sports clothes even increase. But in we notice a dip in other clothes. “
Disrupted chain
The decline in demand for clothing is disrupting the international clothing chain, says Wyger Wentholt of the Clean Clothes Campaign. “In December, the supply of raw materials from China stopped, which had already disrupted the chain. And since March, the demand from brands for new orders has come to a halt.” This means that some brands cancel their orders, sometimes even orders that were already finished.
This has catastrophic consequences for clothing producing countries, report the Clean Clothes Campaign and Fair Wear. For example, clothing in Bangladesh accounts for 84 percent of total exports. The BGMEA, the Bengali organization involved in this, claims that more than $ 3 billion in orders have already been canceled, affecting 2.2 million employees.
Wentholt: “These factory workers have no income and no social safety net. Big brands have a lot of power and think they cannot fulfill their contract without consequences.”
Han Bekke of Modint, a network of manufacturers, importers and wholesalers of clothing, agrees. He is also worried about production countries, while at the same time acknowledging that the industry in the Netherlands has its back against the wall.
“But we should not put the problems from here on the plates of production countries.” Bekke hopes that brands and clothing stores take their responsibility and show solidarity with their factories in countries such as Bangladesh, India and Vietnam. Also to ensure that when people start buying clothes again, not too much damage has been done on the production side.
Hardships
C&A, a Dutch company originally, has canceled its contracts with factories and will not pay for orders already produced, according to a report by the NGO Center for Global Workers’ Rights. According to website Quartz, the fashion chain has canceled orders worth 166 million euros in Bangladesh.
C&A says in a response that the corona virus has forced it to close 1400 stores in Europe and the online sales cannot make up for that loss. “We focus on maintaining liquidity while fulfilling our responsibility to our employees and suppliers. We are currently interrupting the order of new products. We regret the hardships this causes in many parts of our supply chain.”
Postpone sale
Major brands such as H&M and Inditex (Zara) have announced that they will pay for orders that are still in production or are already ready. According to Fair Wear, the 140 brands affiliated with them generally stick to their contracts. “Brands are checked by us every year and we report on that publicly. We see that our brands are struggling enormously, but nevertheless try to support their factories. That may sound logical, but it is not for many brands.”
According to Bekke van Modint, the Dutch government can also play an important role. “We are now trying to maintain liquidity in order not to stop the chain, the government could help with this. We are also trying to promote universal solidarity with our international organization IAF. We are discussing this with the IMF and the World Bank. “
Minister Wiebes and State Secretary Keijzer of Economic Affairs are examining whether the sale of clothing in the Netherlands can be postponed until at least July 1. In this way, the government hopes to support small retailers.
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