“Stand together. Let's show the world that we can do commerce with compassion.”(Indian textiles minister, Smriti Irani).
The unpredictable COVID-19 pandemic continues to overwhelm our healthcare systems, challenge our economic markets and cast long shadows of uncertainty over daily life. Government lockdowns have curtailed the movements of people across the globe resulting in a significant decrease in consumption – and the fashion industry has not been spared. A recent McKinsey State of Fashion 2020 update reports that the “The average market capitalization of apparel, fashion, and luxury players dropped almost 40 percent between the start of January and March 24, 2020”.
As lockdowns force retail stores to close (many close to bankruptcy), clothing companies are now left with unsold stock and no clear timeline for when they can sell the stock. This has led to the scaling back or even cancelling of orders all together from their manufacturers. As a result, both retailers and manufacturers are facing cash flow problems, and are finding it hard to pay salaries, overheads and their suppliers. The further down the supply chain you go, the more the problems spread, and the greater the negative impact on everyday citizens.
Fabric supply chains are especially affected. Cotton suppliers are seeing their order volume shrink rapidly and the problem becomes amplified due to the amount of people involved in the cotton trade. Estimates put as many as 100 million households (or 300 million people) directly engaged in cotton production labor, farm labor and related services including transportation, ginning, baling and storage. And that’s just one raw material – when accounting for other popular fiber and textile industries (wool, tencel, silk, linen, denim, etc.), as well as their auxiliary businesses (trimmings, chemicals & dyes, storage & transportation, etc.) we begin to see the real effect on real livelihoods in the supply chain.
No business means no invoices to collect on. Which means little to no money to pay workers. Many hundreds of thousands of garment workers across South East Asia are currently threatened by massive factory closures and layoffs. Poverty, especially for the most vulnerable members of society, becomes a very worrying issue. Moreover, the pandemic stands to particularly affect those with highest risk of exploitation. Enslaved and discrimination migrant workers are rarely given adequate access to local healthcare resources, and are in many cases, even subject to “stigmatization as the sources of infection risk.”, the World Economic Forum reports. The economic and personal hardships faced by those at the furthest ends of the supply chain due to this tragic crisis cannot be taken lightly.
The crisis has banded together stakeholders and activists throughout fashion. Compassionate brands are a taking countless number of short to medium-term measures to try and survive and to help alleviate the effects on workers in the supply chain. Calls for large fashion companies to honor their orders, and to #PayUp are heating up. Many sustainable fashion brands are answering the call and taking a positive, proactive stance.
ARMEDANGELS, the “ECO & FAIR” fashion label from Cologne, Germany has promised to not cancel any of their orders. In fact, they are currently working in tandem with their production partner in Portugal to help produce facemasks for the public. For each facemask purchase, the brand will donate 2€ to Medecins Sans Frontieres to aid the health programs most needed at the moment. “The supplier is super-happy and the 22 female workers are more than motivated to work on this project as they are feeling to have a real positive impact right” says Lavinia Muth, Corporate Responsibility Manager at ARMEDANGELS. Where there is still real concern about how the situation will affect some of their partners - such as their 366 small scale farmers’ cooperative in India – The brand strongly believes that “sustainable supplier relationships are always built on mutual respect and trust – also in times of crisis” (See the brand's Dealing with COVID-19 message). Other larger brands are taking similar steps to leverage their supply chain networks and help provide more facemasks.
Even smaller brands are stepping up and trying to do right by their suppliers. Sustainable fashion brand Jyoti – Fair Works, is not only continuing to pay their workers in India, they are also working with their artisans to adjust certain product offerings during the crisis. The brand and the artisans are looking into sustainable products that offer high value, can be made from home, and usually require more time to make. As a result, they have started producing hand-embroidered blankets, made from fabric waste materials. Jyoti’s focus has always been about caring for the people in their workshops, and sharing more information about them. This latest initiative simply reflects their ongoing commitment to their company values, and their value chain.
Such actions show that when a network of concerned sustainable fashion folk are willing to roll up their sleeves, they can help out and make a difference during this difficult time. While the small actions won’t completely halt the global economic downturn, they do go a long way helping the most vulnerable in fashion supply chains. They also act as a strong example of conscious community action for other industries to follow.
The COVID-19 crisis and its’ lingering effects will dictate how brands, and manufactures shape their recovery efforts, and future plans. The old ways of low-cost, ‘fast-fashion’ may be dying, and dying fast. As a result, ‘post-crisis’ strategy and success in the fashion industry will be depended on new ways of organizing supply chains.
The recent McKinsey Fashion Update report mentions that fashion companies will need to innovate, and adopt digital solutions to help adapt quickly to the challenges of the future: “Companies must introduce new tools and strategies across the value chain to future-proof their business models,”
Companies will need to setup more efficient and transparent operational procedures so that they can:
This applies both for brands and suppliers/manufacturers. CEOs, COOs, and other decision-makers will need to come up with short-term solutions (such as producing and selling face masks with supplier partners they know) as well as more medium-to-long term strategies that help create more “future-proof business models” (McKinsey Report Update).
It may be awhile before the old ways of fashion consumption come back. The extent of the crisis has made shoppers more conscious and concerned. According to a recent Edelman report, 65% of consumers surveyed said “how well a brand responds to this crisis will have a huge impact on their likelihood to buy that brand in the future.” Furthermore, “33% have convinced other people to stop using a brand that they felt was not acting appropriately in response to the pandemic.” If leaders can steer their companies towards more transparent operations and value chains, then they can start to offer more compelling, valuable, and ethical products to match the concerns of the market.
Communities around the global are putting up the fight. The brave medical minds, innovative scientists and healthcare heroines and heroes on the frontline are hard at work, trying to push back against the pandemic. As of April 1, there are already 41 diagnostics, 23 treatments, and 5 vaccines (in human trials) currently being worked on, and more in development. (See a great summary of current medical developments here).
The race is on for all of us to come together and do our part to help. While there is no clear finish line or end-date in sight - there is still hope and action. For fashion companies, this points towards more forward-thinking, transparent leadership, and definitive action to keep ALL workers safe and healthy. But it doesn’t stop with brands. There is still a committed community of stakeholders - from farm to factory, from rural homesteads to urban home offices – that have means to do what we can. With updated information and collective compassion for everyone affected, we can all do our best.
Yeah. It’s bad. But...as mentioned by Minister Irani, now is the time for the fashion faithful to “Stand together”. Now is the time for hope, courage, and action.
Let’s stand together
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