Under Armour Follows Rivals, Commits To Paying Garment Makers In Full

The athletic brand Under Armour has committed to pay its factories in full and on time for all apparel and footwear in production when the coronavirus pandemic hit. It joins its rivals Nike and Adidas in the growing list of brands agreeing to do the same.

“Amid the COVID-19 pandemic, Under Armour continues to pay to its manufacturers the full negotiated price for all goods, both completed and in process (in process is defined as post-cutting),” said a spokesperson for the company via email.

In March, with consumers in lockdown, a number of major apparel companies canceled and delayed payments on billions of dollars worth of inventory that was already shipped or near completion, leaving manufacturers in debt and struggling to cover garment worker wages. Others circled back and asked for huge discounts, pushing some suppliers near bankruptcy.

While Under Armour was never directly linked to order cancellations, labor advocates pushed them to make a public commitment to pay for orders, after some manufacturers complained of the company delaying shipments, says Scott Nova, Executive Director of the Worker Rights Consortium, which is tracking brands’ commitments to suppliers.

“There will be no discounts, no cancellations, so they’re going to pay for 100% of orders,” says Nova, in reference to Under Armour’s commitment.

Workers at an Indonesian factory, PT Kaho Indah Citragarment, claimed that their pay was cut in half after Under Armour cut back its orders, according to the United Students Against Sweatshops (USAS), a student activist group which is in communication with the garment workers. Under Armour sources heavily from Asia, including Cambodia, Indonesia, Vietnam, and Bangladesh, according to the brands public Supplier List.

“This is a huge win for garment workers we’re in solidarity with in places such as Indonesia,” says USAS campaign coordinator Ana Jimenez via email.

Under Armour and Nike were targeted by campus activists in recent weeks, as licensing deals with college athletics departments are a key part of these companies’ business. After Nike agreed publicly to pay for orders, USAS circulated an online petition and launched a hashtag campaign (#WorkersOverUnderAmour) to pressure Under Armour to follow suit. (As I wrote in my last column, I’ve joined the calls for brands to pay in full for orders.)

Prior to the pandemic, Under Armour was working to increase its profitability and stock prices, but overall sales fell 23% in the first quarter of 2020, jeopardizing a turnaround. It’s significant that Under Armour, despite its financial troubles, is paying its factories and not asking suppliers for price cuts on finished goods, says Nova. “It sends a clear message to the industry that it’s possible to pay suppliers in full despite evident financial distress, and that this is the practice in which every responsible brand will engage.”

As consumers reassess their values in the wake of the coronavirus pandemic, a question lingers over how canceled orders will impact brand reputation in the long-term. To date, 14 brands and retailers have publicly agreed to pay in full for all orders and on time, including fast fashion giants H&M and Zara and American heavyweights PVH, which owns Calvin Klein and Tommy Hilfiger, and VF Corporation, which owns The North Face, Vans and Timberland.

In Belgium this week, after months of lockdown, long lines formed outside of fast fashion chains, including Primark and C&A, which have paid for some but not all of their orders. But the rush to shop fast fashion chains doesn’t reflect all consumers, says Tara St. James, founder of Re:Source Library, a sustainable fashion consultancy. She predicts young shoppers in particular turning away from major chains in favor of independent companies that can guarantee environmental and social responsibility. “I think the rise of smaller, transparent brands will save the apparel industry.

But for the factories who are still owed money by major brands (debts owed are as high as $10 million at one factory and over $3 billion in Bangladesh alone), there’s a singular hope for the future: Getting paid for the clothes they’ve already made.

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