Primark has pledged to assist factory workers during the coronavirus
crisis after establishing a fund to cover the wages component of orders
that have been cancelled.
The fast-fashion retailer closed its entire store estate on March 22,
due to the global Covid-19 health crisis, which has resulted in the loss of
sales of 650 million pounds every month.
The company asked suppliers to stop production as it already had some
1.6 billion pounds of paid-for stock in stores, depots and in transit. All
of this stock has been paid for under its normal 30-day payment terms,
added the retailer.
In addition, Primark has explained that extended payment terms have also
been offered to suppliers to enable Primark to take and pay for further
stock ready for shipment, despite the fact that it can’t sell the stock
while the stores remain closed as the business has no e-commerce platform.
In a company statement, Primark said that it was committed to paying the
wages of workers who were producing Primark orders that have now been
cancelled.
The retailer said: ”Primark is concerned about the impact of workers
engaged in production on further orders that Primark will now not be taking
– that is, goods in production that were due for shipment in the month
following cancellation of orders.
“Accordingly, Primark is today announcing it 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. In consultation with external
stakeholders, the Primark Ethical Trade team will explore mechanisms to
ensure that this money reaches workers.”
Primark to cover wages of factory workers following order cancellations
due to Covid-19 closures
Primark also notes that it has been working closely with the United
Nation’s International Labour Organisation (ILO) in order to collaborate
with governments, international financial institutions, development banks
and others in a position to make available “medium and longer-term
financing to pay the wages and benefits of workers along with economic
support to the garment industry”.
Paul Marchant, chief executive of Primark, added: “Every one of our
stores around the world is closed. With a backlog of stock in stores,
depots and in transit, we have had to make the very difficult decision to
cancel orders for future stock. Finding a way to ensure that workers in our
supply chain in these countries are paid has been a priority over the past
two weeks and we are pleased that this fund will provide relief to these
workers.
“Our focus now is to work with the suppliers, factories, trade unions
and NGO’s in these countries to make sure wages for the orders we have
cancelled are paid to the workers.”
Rosey Hurst, founder and director of Impactt, specialists in ethical
trade, said: “These are unprecedented times which call for unprecedented
action. We are absolutely delighted to see Primark putting its shoulder to
the wheel of reducing impacts of covid-19 on the most vulnerable in its
supply chains. This move will enable Primark and its suppliers, working
together, to make a significant contribution towards supporting workers as
we all weather this global storm together.”
Image: courtesy of Primark
