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Gap Inc assures vendors of compensating for cancelled orders


Gap Inc, owner of the Old Navy, Athleta, Banana Republic and Gap brands, has assured it will work collaboratively with vendors to compensate them in full for finished goods and goods in production that were canceled or subject to pack and hold. The company has extended payment terms on certain orders. It is also providing low cost financing to its vendor partners besides working with its banking partners to increase the amount of funds available within the program.

In June Gap had announced it had cancelled less than 3 per cent purchase orders by value for finished garments and garments in production, and was working with vendors to utilize uncut raw materials for future seasons. Earlier this year the Workers Rights Consortium’s (WRC) COVID-19 tracker had criticized Gap for cancelling its orders, imposing sizable discounts on some orders, related to storage charges; and its extension of payment terms for some orders, without the provision of adequate low-cost financing to affected suppliers.

WRC noted that the apparel giant’s supplier finance program commands sufficient lending capital to address supplier needs that may arise as a result of the delayed payments.