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Coronavirus fallout: H&M suspends sourcing apparel goods

  • Published at 03:40 pm March 29th, 2020
fashion brand H&M
Logo of H&M Group

Given the constantly changing situation and the uncertainty, the brand said they wanted to be clear and transparent towards their garment suppliers

H&M, a Swedish multinational clothing retailer, on Sunday suspended any new orders from the country, and declared potential changes on recently placed orders as the COVID-19 outbreak impacted their business supply chain.

A media statement, issued by H & M, unveiled their future plan on sourcing apparel items from the country worth nearly $3 billion annually.

“The rapid spread of the COVID-19 around the world has caused an exceptional situation   for people, communities and business around the world. It will also of course have a huge impact on millions of garment workers in countries highly dependent on the textile industry,” said H&M in the statement.

Given the constantly changing situation and the uncertainty, the brand said they wanted to be clear and transparent towards their garment suppliers. 

 “At this point, it is necessary to temporarily pause new orders as well as evaluate potential changes on recently placed orders,” said the H&M. 

“But we will start placing orders again as soon as the situation allows,” it added. 

Explaining the reasons for temporary order suspension, the H&M said the situation had a significant impact on the company, including its supply chain. 

“As a consequence of the substantial drop in global demand, we are now reviewing all parts of our business.”

 ”We are carefully scrutinizing and evaluating how to adjust and mitigate the negative effects when it comes to our supply chain and the textile workers,” the statement said further.

“However, the H&M will continue to value the relationship with our suppliers, but in this extreme situation we need to respond fast and take decisions that can be difficult in the short-term, but necessary in the long-term.”

H&M will take goods 

The retailer said they would stand by their commitments to the suppliers by taking delivery of the already produced garments as well as goods in production.

“We will of course pay for these goods and we will do it under agreed payment terms. In addition, we will not negotiate prices on already placed orders,” H& M assured.

Working on finding solution 

The statement said the entire fashion industry now faced its biggest challenge ever and it would utilize its all networks and contacts to find solutions that could  contribute in the best possible way.

“We are in a close dialogue with several partners and industry stakeholders to see how we can and should support in this difficult situation. We aim for finding a joint industry solution involving several stakeholders,” the statement added.

“We are at this instance intensively investigating how we can support countries, societies and individuals from a health and financial perspective. In this first urgent phase, we will focus our efforts on countries that are highly dependent on the textile industry.”

What BGMEA Says

“We work with the H&M with shorter lead time arrangement. And if it does not place new orders, there will have no export orders ahead,” BGMEA President Rubana Huq told Dhaka Tribune. 

She said they did not know yet about what they would do in April-May period amid shutting down of global retail stores caused by coronavirus spread.

The BGMEA president urged H&M to take the deliveries of goods already produced as per their orders and those were in the production process.

 According to Bangladesh Garment Manufacturers and Exporters Association (BGMEA) data, over 300 factories have faced work order cancellations worth nearly $3 billion as of Sunday.

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