COVID-19 deals a crippling blow to fast fashion
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COVID-19 deals a crippling blow to fast fashion

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Coronavirus consequences are affecting all areas of society, with different effects while spreading worldwide. For example, fast fashion witnessed a worsening of the decline it has been living recently in terms of attractiveness, a topic also discussed during MKS Milano Fashion School lectures by Fashion Design students. The required closing of shops led to a further slackening in sales and prospects are hardly any brighter, considering that shopping will follow different practices than before regarding both access to the stores and purchasing.

 Even the two fast fashion giants H&M and Zara have been swept up by the current storm, which has aggravated a situation already going downhill since 2015, reported the American journal Quartz. H&M has just announced to unions the shutting down of two of its shops in Milan, leaving 70 employees out of job. In general, in March the Swedish clothing chain sales plunged by 46% due to the closing of 70% of its stores all over the world. Similarly, Inditex, owner of Zara, had to close half of its shops on a global scale, announcing mid-March that the first quarter sales of 2020 were severely impacted by COVID-19. The Japanese corporation Fast Retailing, whose primary subsidiary is Uniqlo, is expecting a drop by 8,8% in global sales in this period.

At this point, the experts’ main concern is to understand what measures could limit the envisioned damage. Logically, it will be necessary to change the politics embraced until now, as it will not be possible to apply them the same as before. According to Kea & Partners fashion and distribution specialist Céline Choain, there will be a “fall in clothing consumption, forced and immediate” and a “real loss in purchasing power with an already confirmed recession.”

Moreover, last month the financial company UBS released a worrying study that explained how European retailers, such as H&M, Inditex and Dunelm, are the most likely to suffer form the pandemic repercussions. In order to draft its research note, UBS analyzed data regarding sales and manufactured products in China, where the epidemic provoked plant closures or operations at a lower capacity.

All of this represents a serious problem especially for clothing producers that are the basis of fast fashion commercial activity, as China is one of the main suppliers of the necessary raw material. Workers in Southeast Asia - where firms lost billions of dollars because of the major brands and distributors orders cancellation - are the ones paying the highest price from an economic point of view. These countries have weaker and less structured economic, social welfare and protection of labor conditions than western ones. India, Myanmar, Bangladesh, Indonesia, Cambodia, Philippines - countries that fuel fast fashion with their textile production and have been hit by three waves affecting their work rates, as explained by the sustainable economy specialized journal “Valori.”

The first wave overlaps with the emergence of the virus in China, leading to a stop in the export of raw materials used in South and Southeast Asia, where plants had to be closed and workers suddenly found themselves without wages. Because of the second wave, corresponding to the spread of virus in Europe and in the USA, pending orders have been withdrawn by companies, without paying them or requesting others, and suppliers had to close down production sites once again, worsening the already difficult workers’ situation. The spreading of the epidemic in the very same production countries represents the third wave, characterized by the precautional closure of plants and by the same consequences previously explained for workers. Some have decided to continue their activity nevertheless, endangering workers’ health and forcing them to work in crowded factories in hazardous conditions.

The negative consequences of this pandemic, which are affecting millions of people, are explained in detail in the white paper "Who will bail out the workers that make our clothes?” published by the Worker Rights Consortium. This text allows to fully comprehend the role played by American, European and Japanese fashion corporations in the perpetration of unstable working conditions in Southeast Asian textile factories. The link and interdependence between these two realities is unquestionable, but at the same time it is impossible to deny that large businesses reap all the benefits from this connection thanks to offshoring operations: underpaid labor lowers production costs, earning greater profits and taking advantage of the poverty among the population to keep the status quo. Occupation in the textile sector represents the only source of income for nearly 50 million people, most of them women and with salaries so low that they cannot afford to put away money for crisis periods.

That is why we can talk about asymmetry of power in the supply chain, as highlighted by the article “Abandoned? The Impact of Covid-19 on Workers and Businesses at the Bottom of Global Garment Supply Chains” dedicated to Bangladesh. Textile producers have an extremely vulnerable position because they receive payment upon delivery and, when orders are cancelled or not payed by companies, they are at risk of losing their liquid assets. Kadir Koushik, director and owner of ARK Pullover Limited located in Gazipur, said that after Europe’s and America’s closures “more than 1.4 billion orders for clothing products have been cancelled in our country, whose GDP is mostly based on garments,” further explaining that the most serious repercussions will be perceived very soon.

Sources:
Corriere della SeraValoriFashion Network

 


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