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As the epidemic situation in foreign countries continues to ferment and the number of confirmed diagnoses continues to rise, many countries have adopted emergency measures such as closing the city, closing the country, and stopping work to deal with the spread of the epidemic! This has also caused the temporary shutdown of the global economy. Some experts and scholars believe that the epidemic situation is likely to trigger a world economic recession.
Thousands of orders were cancelled, Bangladesh ’s economy was hit hard under the epidemic
Rubana Huq, chairman of the Bangladesh Garment Manufacturers and Exporters Association, recently tweeted LinkedIn.
She wrote: So far, $ 1.5 billion has been lost. Brands have cancelled or postponed orders. We don't know what to do tomorrow. The brands that became partners last month have become strangers.
She said orders for up to 1089 Bangladeshi garment factories were cancelled, which would severely hit the country's economy. Huq has called out the crisis and said, "In an emergency, we can accept deferred payments."
Bangladesh is the second largest garment exporter after China. For Chinese exporters, the crisis will be even broader. The new crown epidemic has just subsided in China, and a wave of withdrawals has hit foreign trade people!
At present, the international market is canceling or postponing orders a lot, and the global economy may have a shutdown problem.
UK market's biggest fashion retailer Primark cancels all orders
According to news on March 22, the famous British cheap fashion chain Primark has canceled all orders from suppliers that have not yet been delivered. The contract stipulates force majeure clauses, and it is precisely the force majeure clauses to cancel orders.
Primark has 40% of its products from China, and it is also a major fashion retailer in the UK market. Just a month ago, Primark was still worried that the epidemic in China would affect their supply chain, planning to find alternative suppliers in Bangladesh, Cambodia, Vietnam, Turkey and Eastern Europe.
Following the rapid turnaround of the British epidemic, the company group announced that it is expected to close 20% of its Primark stores due to the health incident. These stores currently account for 30% of Primark's sales. The impact of these stores on sales is expected in the next four weeks. It will reach 190 million pounds.
Top Shop parent company Arcadia Group freezes payments to suppliers
The Arcadia Group, a fashion retail group that owns Topshop, Topman, Miss Selfridge, Dorothy Perkins, Evans, Burton, has announced that it has temporarily closed all stores in the UK and Ireland, and has frozen payments to suppliers.
Peacocks cancels all orders before June 20
Peacocks, a British home fashion brand, said the epidemic had reduced its store traffic by 50% and they had notified suppliers to cancel all outstanding orders for spring 2020. For goods received after March 16, Peacocks offers suppliers three options: one is to wait until all the inventory is sold before paying; the second is a 50% payment; and the third is the return shipping.
A Peacocks spokesman said it was an extreme move in extreme cases.
New Look suspends full production
British fast fashion brand New Look has now closed all its stores in the UK and Ireland, has halted all production and encouraged employees to take unpaid leave.
Debenhams deferred payment for one month
Debenhams, a well-known British department store, wrote to suppliers asking for support to extend the payment period of all suppliers by 30 days. The department store has closed 22 stores in recent months and plans to close another 28 next year. It has applied for "rent holidays" to deal with the effects of the new coronavirus.
Fossil cancels orders and hits Dongguan enterprises
The Dongguan watch company that manufactures Fossil, an American fashion accessories brand, said that Fossil has stopped all orders and requested to cancel or suspend the original production orders. This has caused the company to face a major crisis and face the risk of shutdown at any time.
I would like to ask, the stores are closed, consumers are closed at home, how to sell goods? Please pay attention to the operation of these major customers, especially if there is a problem with their own financial status. Be sure to follow up with the progress of the order in time to ensure the security of the payment.
How to avoid risks for textile foreign trade enterprises
Textile companies are bound to be more cautious in ordering. Even if orders are actually placed, we must also consider whether the follow-up will be cancelled: if not done, the delivery time will not be up to date; if done, it may be cancelled halfway, wasting input and increasing inventory.
Combined with the business characteristics of most foreign trade, we recommend:
Do not accept foreign trade orders without deposit, or try to take reliable insurance, which can support customers and transfer risk.
If you have been a customer on credit sales, you can tell the customer that this new crown pneumonia caused a shortage of funds for all raw material manufacturers, and they only accept cash orders.
▎Orders already in production must be confirmed with the customer.
Avoid expressions like "do you want this list?" In case the customer doesn't reply to you, you're going to ride a tiger. It is suggested to "know that New Coronary Pneumonia has a serious impact on your country and whether there is any problem with your order shipping or sales. Cancel it within three days if you cannot confirm it (or ship it, as the case may be)." In this way, the customer is forced to confirm the contract again if the epidemic situation has occurred, so as to prevent him from citing "force majeure" to claim liability for breach of contract.
▎If the goods have been delivered and the payment period has been reached, we must pay close attention to the payment. The obligation to pay money is usually not fulfilled because of the epidemic situation.
If the customer uses this as an excuse, the other party is likely to have financial difficulties. Given the time limit for fulfilling the situation, the other party cannot consider payment control, return shipping, etc. if the payment cannot be made.
▎Recommended export companies to sort out stock risks in key countries affected by the epidemic
For the goods that have been shipped, pay close attention to the transportation of the goods, consult and communicate with the freight forwarders and shipping companies in a timely manner, and start the work of reducing the possible customs injunctions. Strengthen the tracking of foreign exchange receipts due to buyers due.
▎It is recommended that export companies communicate effectively with the buyer in time for goods that have not yet been shipped.
Reasonably arrange the delivery time and pay close attention to the risk of rejection and arrears that may occur in the case of epidemic prevention and control.
▎It is recommended that export companies agree in advance when negotiating new contracts
Through force majeure and property rights retention clauses, the risks that may be caused by the new crown pneumonia epidemic are agreed in advance, and the uncertainty caused by the epidemic situation is avoided or minimized as far as possible.
Relax the deadline for new contracts appropriately
For buyers whose business is indeed affected by the epidemic situation, when the new contract is concluded, the payment period may be appropriately relaxed to give the buyer a certain buffer period.
It is recommended to keep a record of communication with the buyer during the epidemic
In particular, it involves the confirmation of claims and debts, tracking of repayments, correspondence emails for collecting debts, WeChat chat records, etc., which provides a reference basis for rapid settlement of claims once they are out in the future.
Some sources focus on the horizon, network, etc., and are comprehensively organized by the Global Textile Network.
Dongyang Laichi Environmental Protection Technology Co., Ltd. has always been committed to the research, development and production of medical non-woven fabrics, spunbond non-woven fabrics, elastic non-woven fabrics, and non-woven products. The elastic non-woven fabrics produced by the company can be replaced, recycled and reused, so they can no longer worry about health problems.
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