Levi's alters supplier payments after Covid criticism

9 July 2020

Levi Strauss & Co has confirmed it will pay all suppliers for finished ready-to-ship orders and in-progress orders after being criticised for its payment terms.

Levi’s also said it planned to use raw materials already delivered by suppliers for product orders in later seasons.

In late May non-profit Worker Rights Consortium (WRC), which tracks brands failing to behave responsibly toward suppliers and workers during the coronavirus crisis, criticised the company for failing to make sufficient commitments to pay for orders on time and in full.

In a statement Levi’s said: “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.”

It said its programme with the International Finance Corporation (IFC) allowed suppliers to get early payments at favourable market rates.

“The majority of our products are made by suppliers with access to the programme and more will soon have access,” said Levi’s.

“The IFC programme also provides better rates to suppliers who perform well on our social and environmental assessments, thus incentivising suppliers to respect and protect worker rights.”

The company said it provided extra assistance to suppliers in locations not served by the IFC programme and was looking at collective industry efforts to support those suppliers and their employees.         

“Our sourcing leads are staying in close conversation with suppliers and we are factoring their circumstances into our decisions,” said Levi’s.

“As our stores and wholesale partners open back up, we are starting to see demand come back and production turning back on.”

The company said it had shared, and was updating, health and safety guidelines related to Covid-19 with suppliers.

Additionally, the Levi Strauss Foundation is to grant $1m to address the health, food and other needs of apparel workers.

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