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C&A response to media articles on garment order cancellations
The apparel industry is facing an unprecedented crisis that no one has ever experienced. Like all apparel retailers, C&A is severely impacted by the COVID-19 pandemic. Within a few days, all of our 1,400 stores across Europe had to be closed indefinitely due to government restrictions.
Our suppliers around the world are hard hit by these unprecedented circumstances. We deeply regret the hardship this is causing and aim to support them as best we can during this time of uncertainty.
We reached out to our suppliers individually to identify ways to mitigate the devastating economic impact of this crisis on our business and on our suppliers and are seeking mutually beneficial solutions for all orders.
C&A has so far accepted delivery and agreed to pay for 97% of all orders placed before the crisis, including 100% of all goods completed.
Since many suppliers' factories had to shut down their production completely for several weeks over the past months due to mandatory local lock downs, it is not advisable to re-instate 100% of all previous orders to avoid excessive overtime work and violation of the important COVID-19 related health and safety measures implemented in the factories.
We therefore disagree with the conclusions of the US-based NGOs behind the "#PayUp-Initiative" and the "COVID-19 Tracker". We have asked these organisations to change C&A's ranking in the classification provided on their campaign websites, which is based on outdated information and gives the misleading impression that C&A is not honoring its commitments with regards to its suppliers.
In contradiction to the NGOs' claims on their websites, only 2,5% of our orders have been moved to 2021. 80% of our suppliers in Bangladesh have been supported by our company's supplier finance system in cooperation with our partner bank during the crisis. Prices have not been re-negotiated.
Frequently Asked Questions:
What have you agreed with your suppliers?
We have been talking to our suppliers to find mutually beneficial solutions with regards to all orders.
C&A has so far accepted delivery and agreed to pay for 97% of all orders placed before the crisis, including 100% of all goods completed.
Each supplier is in a unique situation and requires an individual approach. All decisions have been taken in full agreement with our suppliers. 80% of our suppliers in Bangladesh have been supported by our company's supplier finance system in cooperation with our partner bank during the crisis. Prices have not been re-negotiated.
What about the supplier letter that several media outlets have mentioned in which you apparently cancelled all orders?
The letter to our suppliers that some media are referring to is more than a month old and was an immediate, precautionary measure driven by legal considerations required to address this unprecedented situation. The lack of certainty about how long and how severely this crisis would affect our business, left us with no other option at that time than to take drastic and immediate action to give us time for an obligatory due diligence process and to carefully look at what business options may possibly be available in the face of a complete shutdown of all of our 1,400 stores across Europe.
Since then, we have been reaching out to our suppliers to identify ways to mitigate the devastating economic impact of this crisis on our business and our suppliers.
In discussions with our suppliers, we have reassured them that we will reinstate and pay for the majority of orders – to date 97% of all orders. In the coming weeks we will work on solutions regarding the remaining 7%.
What else are you doing to help the workers in the production countries?
The COVID-19 pandemic presents an unprecedented challenge for our industry as a whole. It is important to acknowledge that no single company can deal with the economic repercussions for the production countries alone. To overcome the current crisis requires the collaboration of brands, governments, labour unions and international financial institutions to find concrete solutions. We are in talks with other industry stakeholders including other brands and the International Labour Organization (ILO), the International Organization of Employers (IOE), the International Trade Union Confederation (ITUC) and IndustriALL Global Union to find ways to work together to mitigate the impact this crisis has on the supply chain.
C&A recently joined a global multi-stakeholder action plan to help garment manufacturers and workers in developing economies survive the disruption to global trade caused by the COVID-19 pandemic. The press release is available here.
Why don’t you sell your garments online while your stores are all closed?
C&A is a traditional high-street retailer with more than 1.400 stores across Europe. Our online business is relatively small compared to our store sales and not enough to compensate for the loss of turnover caused by the closure of our stores.