Primark to cover wages of factory workers after order cancellations

Primark

Primark has created a fund to cover the wages of workers in factories in countries such as Sri Lanka and Bangladesh after it was forced to cancel forward orders due to the coronavirus crisis.

The value fashion giant put a halt on all forward orders, while its stores were all closed towards the end of March, as it has no website and no means of shifting stock until its stores are permitted to re-open.

It has been one of many retailers to cancel forward orders leading to fears of a humanitarian crisis in places such as Bangladesh as factories were left without work and no means of paying staff.

However Primark said it would support its suppliers in Bangladesh, Cambodia, India, Myanmar, Pakistan, Sri Lanka and Vietnam to cover the wages of staff, taking into account the varying government aid in each country. The company said its its Ethical Trade team would ensure that workers received the cash.

In a statement it added: “Additionally over the past two weeks, Primark 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 benefi

Primark CEO Paul Marchant said: “Every one of our stores around the world is closed. With a backlog of stock in stores, in 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 NGOs in these countries to make sure wages for the orders we have cancelled are paid to the workers.”

For every month that Primark is unable to open its stores it stands to lose £650m in sales. This morning its parent company ABF said senior directors would all be taking a 50% pay cut to help with cost control.

Many other large groups have cancelled orders and some have come under heavy criticism for refusing to pay or only part-pay for work in progress. However H&M revealed yesterday that while it had paused new orders, all fulfilled orders and work in progress would be paid for in full.