Brands & Buyers cancel 31 per cent of global orders to their supply chain. ITMF New report.

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Global Brands and retailers have concealed an average of 31 per cent of orders with their suppliers in the global textile value chain during the COVID-19 pandemic, according to new research report.

Recently, The ITMF (International Textile Manufacturers Federation) has conducted a second survey among ITMF members and affiliated companies and associations about the impact of the Corona pandemic on the global textile chain. Near about 700 companies participated in the survey.

Companies in all regions of the world suffered significant numbers of cancellations or postponements of orders. The results of the second ITMF Corona Survey reported that on average orders are down by 31 per cent and that turnover for 2020 is expected to drop by 28 per cent. The severity of the decrease ranges from -20.0 per cent in East Asia to -41 per cent in South America, according to the report by ITMF.

The report show that companies in all regions of the world are expecting their turnovers in 2020 to be significantly lower than in 2019. On world average, the turnover in 2020 is expected to be -28 per cent lower than in 2019. While in South Asia the expected turnover will fall by -15 per cent, companies in Africa are expecting a drop of -45 per cent.

Against the backdrop of the Corona-pandemic, which has spread across all over the world the International Textile Manufacturers Federation (ITMF) is urging governments to increase the support their textile and apparel industries to overcome this period of an unprecedented demand and supply shock.

“The textile and apparel companies around the world are struggling and with them millions of workers and employees. In such times, both the public and the private sectors must work closely together, to avoid an economic and social meltdown”, ITMF President, Mr. Kihak Sung, emphasized .

Some industrialized countries have sophisticated instruments like short-time work. To avoid laying off workers, companies are reducing their working hours and wages, with the government making up some of the employees’ lost income. Most governments in developing countries do not have the necessary mechanisms in place and are lacking the resources. Therefore, it is important to find creative solutions between governments, international institutions and the private sector, that can be implemented quickly, Mr. Sung added.

At the same time the ITMF is asking all stakeholder in the supply chain to work closely together. Above all, ITMF is asking retailers and brands to refrain from making use of any ‘force majeure clauses’ in their contracts with suppliers. These would lead to a cascade of cancellations of orders that are ready for shipment or in the process of completion. Instead, brands and retailers as well as all other stakeholders in the supply chain should have dialogues and look for creative solutions that allow partners to survive this unprecedented period together.

ITMF was founded in 1904 and its members are associations and companies in the fibre, textile, apparel, home textile, textile machinery and textile chemical industry in almost 60 countries around the world, that are employing directly and indirectly millions of people.

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