A fashion apparel brand Gap Inc has committed to paying its suppliers in full for orders it has canceled due to the pandemic that was already completed or in production.
The company assured its vendors to compensate in full for finished goods or goods in production that were canceled or subjected to pack and hold.
The company also further engages its vendors by stating it is working towards providing low-cost financing to their vendors by working with their banking partners to increase the number of funds available within the program.
Gap Inc, which is also the owner of Old Navy, Athleta and the Banana Republic had previously stated it was in “close communication” with suppliers and planned to meet each one to evaluate orders, operating restrictions and health and wellbeing of their workers.
This statement allowed the Worker Rights Consortium (WRC) to remove Gap Inc from its COVID-19 tracker of companies that had failed to pay their manufacturers for canceled orders that were completed or were in production.
A WRC spokesperson stated that, given that the corporation was put through severe challenges during the crisis even more so than those confronting some of its competitors and given the large volume of orders at stake it is to Gap inc s credit that it has made a priority to honor its obligations towards its suppliers and workers concerning past orders.
WRC had previously criticized Gap for canceling orders and had demanded “sizable discounts” to accept some orders and extend payment terms without providing adequate low-cost financing.
The WRC has noted it’s supplier finance program now commands sufficient lending capital to meet supplier needs, irrespective of the company extending payment terms to some suppliers.
Gap claims to have canceled less than 3% of completed orders in production.
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