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Primark to pay factory wages

Primark has established a fund to cover the wages component of orders that have been cancelled. 

Primark’s entire store estate has been closed since 22 March, which has resulted in the loss of sales of £650m every month. The retailer said it had asked suppliers to stop production as it already had some £1.6bn of paid-for stock in stores, depots and in transit. All of this stock has been paid for under its normal 30-day payment terms. 

Extended payment terms have also been offered to suppliers to enable Primark to take and pay for further stock ready for shipment. 

Under this new commitment, Primark has pledged to pay the wages of workers who were producing Primark orders that have now been cancelled. This covers products that were due for shipment in the next month. 

In a company statement, Primark said: ”Primark is concerned about the impact of workers engaged in production on further orders that Primark will now not be taking – that is, goods in production that were due for shipment in the month following cancellation of orders. 

”Accordingly, Primark is today announcing it will fund payment of the wages that relate to this product, taking into account adjustments for government support packages provided in each country. This action will cover orders from the following countries: Bangladesh, Cambodia, India, Myanmar, Pakistan, Sri Lanka and Vietnam. In consultation with external stakeholders, the Primark Ethical Trade team will explore mechanisms to ensure that this money reaches workers.”  

It adds: “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 benefits of workers along with economic support to the garment industry.”

Paul Marchant, CEO of Primark, 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.”

 

 

 

Readers' comments (7)

  • Badge of honour, other retailers (you know who you are) hold your head in shame, the bold and honest will survive and reap the rewards where poor weak leadership fails the brand and all associated with it.

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  • Note, last night Primark put all retail assistants into furlough - no extra top up of 20% paid for by Primark. Only the 80%.Managers have been told no word on their pay at all yet. Not good.

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  • Above to a certain extent is necessary and unavoidable, I cannot think of any retailer that is not doing this, at least Primark is protecting supply chain and thinking forward, contrast with Newlook and Urban which is an absolute disgrace and utter disgrace, workers in third world countries will go hungry because of this !!!

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  • Well done Paul, thinking ahead....a rare commodity in this industry right now.

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  • So Primark have changed tactic on their Force Majure statement which was a disgrace . So now they are thinking more deeply about media and public views on their cancellation policies which will damage both workers and the environment

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  • Primark however are not topping up the 80% furlough however like many other responsible retailers. Managers still don't know if they are being paid

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  • They Purchase 90% of there volume out of china this scheme only covers anywhere but china great con what a joke

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