Day 6

Fashion industry, garment workers walloped by COVID-19, says journalist

The retail economy has suffered massive losses as a result of the COVID-19 pandemic, but the fashion industry in particular is feeling "ripple effects all up and down the supply chain," according to journalist Marc Bain.

Goods produced months ahead of time likely to collect dust as pandemic shuts down retail market

Labourers wearing face masks work in a garment factory during a government-imposed lockdown, as a preventative measure against COVID-19, in Asulia, on the outskirts of Dhaka, Bangladesh, on April 7. (Munir Uz Zaman/AFP via Getty Images)

The retail economy has suffered massive losses as a result of the COVID-19 pandemic, but the fashion industry in particular is feeling "ripple effects all up and down the supply chain," according to journalist Marc Bain.

"It takes them a while to design and then manufacture a collection, usually in Asia, and then ship it and everything. So they have stuff already piled up in warehouses and stores," Bain, fashion reporter for Quartz, told Day 6 host Brent Bambury

Because of its seasonal nature and long lead times, companies may find themselves awash in new products that miss the narrow window to sell them, Bain explained.

He suggested many brands will be forced to liquidate their unsold spring and summer items on a steep discount, or move them to outlets and third-party discount retailers.

"The reality of the situation is that a lot of stuff is going to end up being discounted and sold in fire sales … just to clear out space."

Bangladeshi workers protest mass layoffs

Among the hardest hit are the 4.1 million people working in Bangladesh's garment factories. According to Bain, more than one million have already been fired or furloughed. Those numbers are likely to rise as similar layoffs happen in other countries like Cambodia, India and Myanmar.

Following the layoffs, hundreds of Bangladeshi garment workers blocked a highway outside Dhaka on Friday to demand unpaid wages during the nationwide lockdown that has forced most factories to suspend operations.

"The government should take care of us. I did not get my wages for the last two months," said a 21-year-old woman who refused to give The Associated Press her name for fear of retribution from factory owners.

Dhaka garment workers shout slogans as they block a road demanding their due wages during the lockdown on Wednesday. (Mohammad Ponir Hossain/Reuters)

Orders worth $3.2 billion US ($4.4 billion Cdn) have been cancelled by global brands, affecting 2.26 million workers, according to the Bangladesh Garment Manufacturers and Exporters Association.

"The factories can't pay their workers. They can't pay their bills. And there are millions of workers whose livelihoods are at stake here. These are very vulnerable people who ... might not have a bank account with savings," said Bain.

"They're basically working on very low wages to support themselves and their families, often month to month."

Bangladesh Health Minister Zahid Maleque said the country's death toll reached 75 by Friday, with 1,838 total positive cases of the virus.

Rethinking the supply chain

Bain says the global shutdown will likely force fashion companies to rethink the internationally interconnected nature of how clothes are made.

While clothing may be stitched together or assembled in Bangladesh or Turkey, he explained, much of the raw materials like fabric or zippers still come from China, whose economy was slowed to a crawl when the coronavirus first swept through Hubei province.

"I think everyone is looking at the situation now and thinking about how exactly they can work out some different scenarios into their supply chain so that they can be more flexible in case anything like this ever happens again," he said.

Written by Jonathan Ore with files from The Associated Press. Interview produced by Rachel Levy-Mclaughlin.

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