Primark has established a fund to cover the wages component of orders that have been cancelled. The company asked suppliers to stop production as it already had some £1.6 billion 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.

On top of that, extended payment terms have been offered to suppliers to enable Primark to take and pay for further stock ready for shipment. This is despite the fact that nothing can be sold while the stores remain closed. In addition, 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 has announced that 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 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. 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.