Covid-19: Major fashion brands are cancelling factory orders — but where will those clothes end up?

by | Apr 13, 2020 | Uncategorized

In the face of global pandemic, major fashion brands have initiated sweeping order cancellations — abandoning the factories who produce for them with devastating human consequences. But there’s another question that needs to be asked: where will the clothes from canceled orders end up?

As a former Cambodian garment factory manager, it’s my reasonably informed hunch that the canceled orders will either go to landfill or be incinerated. Because we’re not talking about cancellation of future orders, for which raw materials have yet to be purchased and peoples’ time yet to be paid. We’re talking about canceled orders for which the goods have already been created — financed by the factory.

The goods will remain in their country of origin. If a brand cancels an order, they certainly won’t pay to ship them to their intended destination. And neither will the factory.

The garments are probably branded. It doesn’t matter if branding takes the form of a big bold front-and-center print or is just a small sewn-in label that could hypothetically be removed. A factory can’t approach H&M to buy garments it produced for Zara. Selling the products to other major buyers is off the table.

What about selling the goods locally? Here too the fact that the clothes are branded is problematic. If brands caught wind that products with their name on them were for sale in unofficial outlets, a factory would be risking its relationship with the brand, and future orders.

Plus, many factories are ISO9001 certified. ISO9001 certification is about quality control systems, where the definition of quality stems from customer requirements. The customer is the brand, and from the brand’s point of view, having branded products for sale in unofficial outlets is not a quality service. Part of accreditation is being able to prove what we do with extra branded material — like quality defects, offcuts, or overstock.

A roster of auditors will inspect our paper trail. How many kilos of products did we produce? Can we demonstrate that the number of products exported makes sense relative to this? Does the discrepancy match to our inventory records and defect rates? This data will be cross checked against the number of kilos cleared by a waste management company. We’ll need to show receipts.

This extends to branded raw materials that have been purchased by the factory but haven’t yet been used for production. For example, a factory might have purchased extra rolls of fabric needed to produce a given brand’s collection in advance. If a product sells well, the factory must be prepared to produce a repeat order quickly because leads times are short.

In other words: the factory must pay to destroy the goods and raw materials that they own and paid for while the environment absorbs even more waste from an already offensive industry. Meanwhile, brands are letting themselves off the hook: Covid-19 is a force majeure — an unforeseeable and unpredictable event which absolves them of liability.

Anyone who wears clothes is part of the fashion supply chain. Demand to know how brands intend to deal with the extra waste their cancellations have created. If most brands aren’t going to take responsibility for the human impact of their cancellations, at the very least they should lead on solutions for minimizing the extra waste it creates.