The UK-based suppliers are facing tough times as retailers extend payment terms and cancel orders in these tough times. If the existing conditions persist for long, the suppliers warn the fashion industry of being wiped out.
Nigel Lugg, Chairman, UK Fashion and Textile Association, has revealed that majority of retailers are extending payment terms and there are widespread cancellations even of orders in progress.”
Suppliers facilitating New Look, a fashion chain with 400+ stores in UK, received a letter which informed them that they would not be paid for orders in production.
This is simply horrifying as the retailers and buyers are not even accepting orders that have been already completed, nor are they paying for those orders.
The fact that raw material is always purchased beforehand needs to be understood, as the retailers are deferring their orders owing to the present situation. It might destroy firms and factories throughout the supply chain in such a vulnerable scenario.
To the dismay, retailers cannot soak a sudden revenue plunge and the cost of their liabilities. And cancellation of orders has led to whole seasons such as Autumn/Winter, Spring/Summer ending up in piling up of stock inventories.
