Buyers willing to pay for goods processed, in production

In an exclusive communication with Fibre2Fashion, British multinational retailer Tesco Plc, American retail corporation Target, American fashion company Ralph Lauren, and Irish fast fashion retailer Primark have said that they would be willing to pay for goods processed as also those under production.

Tesco Plc has said it is committed to paying suppliers for orders that have been processed and is working with them to assess the wider impact of the COVID-19 pandemic. “The majority of our orders will carry on as normal and we will continue to source from our suppliers on their current payment terms. We are committed to ensuring workers are treated fairly during this unprecedented time,” a Tesco spokesperson said in an emailed communication to Fibre2Fashion.

Tesco is working with its brand, retail and union partners through the ACT group (Action, Collaboration, Transformation) to help protect workers in its garment supply chain.

Target values relationships it has with its supplier partners and sees them as part of the team. "We simply could not serve our guests without them. As always, Target is committed to our suppliers across the globe and will pay for orders already produced or in production," a company spokesperson said over email.

With the surge in food & beverages and other essentials, Target is working hard to meet the increased demand in close partnership with its trusted vendors. Additionally, in the short term, the company is making adjustments to its orders in categories where it is seeing slow demand, like apparel and accessories.

"We are closely monitoring and reassessing our plans across our categories to meet the evolving needs of our guests. Our team remains focused, as always, to meeting our guests’ needs at this time, and our long-term commitment to our suppliers remains a priority for Target," the statement said.

Understanding that the scale of the ongoing slowdown of future orders can have a significant impact on partners’ liquidity, Ralph Lauren has a vendor payments programme in place which enables suppliers to receive payments on a shortened timeframe at favourable market rates.

"In accordance with our responsible purchasing practices, we will settle payment for finished goods and goods already in production," Allison Peschet from the company's Global Corporate Communications team said.

"Primark is paying for all stock that is in store, depots and in transit. All of this stock has been paid for under its normal 30-day payment terms. It has also offered extended payment to suppliers to enable Primark to take and pay for further stock ready for shipment. This is despite the fact that nothing can be sold while the stores remain closed," a spokesperson for the company said over email.

Primark has also announced a fund for supporting suppliers to pay worker wages. The company said: "Primark is concerned about the impact of workers engaged in production of further orders that we will now not be taking – that is, goods in production that were due for shipment in the month following cancellation of orders. Accordingly, we have announced we will fund payment of the wages that relate to this product, taking into account adjustments for government support packages provided in each country. This action will cover orders from the following countries: Bangladesh, Cambodia, India, Myanmar, Pakistan, Sri Lanka and Vietnam.

"We have worked alongside many of our suppliers for years and value our relationships enormously. We hope that our normal trading relationships can resume as soon as possible."

Fibre2Fashion News Desk (RKS)