Gap Inc. is reportedly asking suppliers to cancel shipments of summer orders and halt fall production, with the exception of items intended to be sold on the company’s e-commerce platform. These actions are intended to mitigate risk for the company amid the coronavirus pandemic. Gap will reportedly provide additional information to vendors by April 14, 2020. Management said that the company is making decisions based on the best interests of their employees, customers and partners, as well as for the long-term health of business, according to a statement reported by The Business of Fashion. On March 19, 2020, Gap temporarily closed all of its stores due to the coronavirus situation. The company then furloughed the majority of its 80,000 store workers on March 30. Gap has drawn down on its $500 million credit line, suspended its dividends and cut capital expenditures. More Retailers, Suppliers and Workers Will Be Impacted by Order Cancellations Gap’s plans are notable for stretching into the fall season, which implies that retailers are tentatively preparing for a coronavirus shutdown that is much longer than many originally announced closures for. We expect that more retailers will feel pressure to cancel orders and payments to suppliers, which will impact the entire supply chain. As a result, an increasing number of apparel and footwear brands will be affected by postponed deliveries and work cancellations amid the coronavirus pandemic, and factory workers jobs will be impacted globally. For example, more than 4 million factory workers in Bangladesh could lose their jobs if retailers do not honor their commitments, according to the Bangladesh Garment Manufacturers and Exporters Association. Some retailers have already announced the cancellation of vendor or customer orders. and we expect this to continue as the coronavirus pandemic endures.

• H&M canceled vendor orders and is only accepting shipments of products that have been made already. The company did not specify suppliers but promised that it would pay for already produced goods under agreed payment terms.
• Macy’s said on its website that the coronavirus is forcing the company to halt both hiring and spending, as well as reduce receipts and extend the terms of payment for all goods and services.
• Marks & Spencer and Primark are among the European retailers suspending or canceling orders.
• Ross Stores notified its vendors that the company would cancel all merchandise purchase orders through June 18 due to the impact of the coronavirus.