Global garment makers seek fair deal from stores

Garment makers spanning Asia, the Middle East and North Africa are demanding better contract terms from global clothing retailers.

That's according to a draft document seen by Reuters.

Suppliers hope a united front will prevent retailers from playing them off against each other.

After widespread cancellations and payment delays at the start of the global health crisis hammered the industry.

Global retailers including Arcadia, Gap, Kohl's and Primark canceled or paused orders with factories in Bangladesh, thought to be worth almost $3.7 billion in March and April last year.

While some, including Primark, H&M, Inditex and Gap, later committed to paying the canceled orders in full, billions of dollars worth of payments are estimated to be outstanding globally.

Arcadia and Kohl's did not respond to a Reuters request for comment.

The collaboration is between thirteen associations.

They represent garment suppliers from countries including China, Bangladesh, and Myanmar.

As well as Cambodia, Vietnam, Pakistan, Turkey, Morocco and Indonesia.

The draft document due to be released later this month includes a maximum 90-day payment term.

And an end to discounts after orders are placed.

Though the document will not be legally enforceable, those behind it hope it will lead to better working practices.

Global retailers lost $1.2 trillion in sales in 2020, as lockdowns decimated demand and shut stores for months on end.

Many clothing retailers were forced to impose steep discounts in an attempt to get rid of unsold stock, sometimes cutting prices paid to suppliers when goods were already in production.

Some, such as UK chain Marks & Spencer, drastically extended the length of time before producers got paid.

Garment makers say their industry won't survive without a fairer deal.