H&M Says Lower Demand Affecting Orders With Suppliers

The fast-fashion chain said it will honor commitments to goods in production.

ByMimosa Spencer on March 31, 2020

PARIS — Amid mounting concern for apparel industry suppliers, H&M said it will honor commitments for delivered products as well as goods in production.

The fast-fashion retailer is reassessing orders on a daily basis as the drop-off in demand from the coronavirus affects business, it said in an e-mailed statement.

“The situation is naturally having an impact on our whole company, including our supply chain and the substantial drop in global demand has a significant effect on our order placement at suppliers,” said the company.

“We will stand by our commitments to our garment manufacturing suppliers by taking delivery of the already produced garments as well as goods in production. We will, of course, pay for these goods and we will do it under agreed payment terms,” the retailer added.

The company has a presence in around 20 production markets, and works with over 750 suppliers of commercial products in 1,700 manufacturing and processing sites that employ 1.6 million people, according to figures in the group’s annual report.

Primark, which belongs to Associated British Foods, said last week that it informed suppliers it would stop placing new orders.

“To manage Primark stock, we have also regrettably informed suppliers that we will stop placing new orders,” said the company. It has closed all 375 stores in 12 countries, leading to an estimated loss of 650 million pounds of net sales per month.

H&M releases its three-month financial report for the Dec. 1 to Feb. 29 period on Friday.