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Turkish Factories Urge Brands to Shun ‘Short-Term’ Thinking

Turkish suppliers are imploring their American and European partners to keep their promises and work to maintain goodwill through the coronavirus-induced panic that has overtaken the fashion landscape.

On Monday, the Turkish Clothing Manufacturers Association Board (TGSD) called out U.S. brands and retailers for a rash of order cancellations, production suspensions, payment extensions and even demands to halt in-process orders. According to the trade group, some companies have requested to defer payment on orders that have already been delivered to distribution centers and stores.

“When governments declared lockdown for societies due to health and safety reasons, global brands’ reaction was to close down retail stores all around the world due to the sudden decline in sales,” the board wrote. “As a result of losses in sales, volume and revenue, brands then turned to their suppliers with a number of defensive measures which have severely harmed the garment manufacturing industry employing over 1.5 million people in Turkey.”

According to the board’s statement, TGSD has received hundreds of messages from manufacturers and suppliers drawing attention to these issues and detailing the circumstances that their organizations are facing.

According to the board, factories are facing a massive buildup of inventory, with many large-volume orders cancelled. “Along with the inventory cost, manufacturers bear full liability for materials nominated by brands on their own, which constitutes an existential threat to companies most of which operate within one-digit margins,” they wrote.

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If brands do not step up to help their suppliers finance the minimum liabilities, their workers will suffer, they said.

While Turkish suppliers acknowledge the challenging retail landscape, as well as brands’ desire to preserve liquidity during this trying time, TGSD requested that the country’s American and European partners seek constructive solutions.

“As long as the requested delay time is reasonable, manufacturers may bridge the gap by benefiting from relief programs or monetary funds provided by the Turkish government,” they wrote, adding that global brands should seek support from their own governments to keep their businesses afloat.

“This crisis presents an opportunity for retail businesses and manufacturers to reinforce their dialogue, and continue to communicate with mutual respect and understanding to maintain a healthy and sustainable supply chain,” they said.

If retailers and brands prioritize “short-term gains” at the expense of other stakeholders in their operations, they wrote, their credibility will be shot.

“It is known that retail businesses firmly uphold ‘workers’ rights’ at all times and claim ‘integrity,’ ‘trust,’ ‘commitment’ and ‘sustainability’ to be sine qua non for their operations,” the letter-writers wrote.

“Failing to recognize, own and act on their own share of responsibility would mean contradicting with their established ‘core corporate values,’” they added.

TGSD advised that fashion businesses should work to preserve their long-term strategic partnerships, as the pandemic will end in due time. “True partnerships are those that yield long-term benefits for decades to come,” they said.

Turkey exported $628.53 million worth of apparel to the U.S. last year, according to the U.S. Office of Textiles and Apparel.