VF paying suppliers for all orders already produced

Additionally, "We are honouring all valid purchase orders with a factory release date before June 1, 2020," the American apparel and footwear company said in an emailed response to Fibre2Fashion. "VF agrees to honour the quantity and price of goods for purchase orders with a factory release date before June 1, 2020."

However, "in some cases, VF is delaying shipment dates to manage the flow of goods into the destination country. When shipment must be delayed, we engage with our suppliers to determine if the shipment delay will create a cashflow challenge for our supplier, and if so, VF will work with the supplier to support their financial needs through a variety of potential solutions," a VF press release said.

VF has asked its suppliers to pause work on any open purchase order with a release date on or after June 1. "This will allow time for us to reassess projected consumer demand so we can better understand the appropriate timing for the delivery of these orders," it added.

Meanwhile, VF has asked all suppliers with paused orders (those for release after June 1) to provide details of their liabilities resulting from ordered raw materials and work completed in relation to these open purchase orders.

"To help us manage this situation in partnership with our suppliers, we are not issuing new purchase orders until we have better visibility of consumer demand and production needs," VF said. "Looking ahead, we will update and communicate the payment terms and conditions for future purchase orders."

VF said that the steps taken by the company demonstrate its commitment to maintaining strong working relationships with its suppliers and its shared interest in maintaining open channels for ongoing dialogue and discussion.

At the same time, the company is working with its peers across the apparel and footwear industry, as well as with multi-stakeholder organisations to identify additional opportunities to support apparel factory workers during the current uncertain times.

"We will continue to monitor the developments in the global Covid-19 pandemic and its impact on the contract suppliers and workers throughout our global supply chain. We will modify our actions accordingly," the VF release said.

Fibre2Fashion News Desk (RKS)