The Amsterdam court has ruled in an interim judgment that G-Star Raw is liable for the damage caused to a Vietnamese clothing factory. The Dutch denim brand had canceled orders to the supplier due to difficulties during the pandemic.
Official court documents show that Vert Fashion Company Limited lost revenue because G-Star failed to honor its agreements. The brand had committed to sourcing jackets of a certain type from the company for three years, which it ultimately didn’t do.
The clothing supplier demanded 16 million euros from G-Star Raw, which the court did not accept. The court considered this damage calculation by the supplier to be too broad. It has not yet been decided how much G-Star will have to pay to the Vietnamese factory.
Cancellations led to factory closures
At the start of the pandemic, the fashion industry was rife with reports of brands and companies canceling orders, trapping suppliers. What is notable about the injunction is that the court considered G-Star’s social responsibility policies. The cancellation of orders led to the factory in Vietnam having to close and the workers subsequently being laid off. The judge pointed out that this violates the corporate social responsibility principles, which G-Star says it respects.
The ruling shows that suppliers who have suffered losses during the pandemic can actually get justice in court. Whether there will be other similar lawsuits remains to be seen.
This translated post previously appeared on FashionUnited.nl.