Levi's adjusts financing to give more support to garment workers

By

Gabriella Lacombe

Published
Jul 8, 2020

Levi Strauss & Co. has announced its plans to give more support to its garment workers during the Covid-19 pandemic. 

A self-proclaimed "proudly progressive company," Levi's has a track record of ethical business moves, including previously announced plans to address its lack of company diversity; a donation of $1 million to a range of non-profits helping communities targeted by the Trump administration; and the launch of a number of environmental initiatives. 

When it comes to the company's relationship with its suppliers, Levi's has worked to provide support through an ongoing partnership with the International Finance Corporation (IFC), creating a program that gives suppliers access to early payments. However, despite its previous works, Levi's still recently appeared on a list of brands that have mistreated their garment workers during the Covid-19 pandemic.

The list, posted by the Worker Rights Consortium (WRC), claimed that Levi's was listed "among those brands that have not made sufficient commitments to pay for orders, on time and in full." 

After the list was published, Levi's released a statement on July 2 detailing its plans to adjust its financing for the benefit of garment workers.  

"We are taking full responsibility – and paying in full – for all finished, ready-to-ship orders and in-progress orders," the statement said. 

"We also plan to use raw materials already received by suppliers for product orders in later seasons. While we extended our payment terms, we believe our current terms are consistent with industry practice, and we have not asked for any discounts on payments. Our sourcing leads are staying in close conversation with suppliers and we are factoring their circumstances into our decisions."

The company continued, noting that it planed to expand access of its program with the IFC to more suppliers. On June 6, the WRC edited its list, confirming that Levi's had given all of its suppliers access to low-cost financing, guaranteed by Levi’s, to help them weather Levi’s payment delays, adding that "Levi’s is providing this access via an expansion of its IFC loan program and the creation of a new loan facility designed to accommodate suppliers ineligible for the IFC program." 

The announcement comes as initiatives like ethical fashion nonprofit Remake's #PayUp campaign call out several big brands, including Kendall and Kylie Jenner's dual brand, for not paying their garment workers during the pandemic as sales slide. Other businesses that have been accused of avoiding payments include American Eagle Outfitters, Gap and J.C. Penney, among several others.