The energy crisis has thus started spreading to the continent’s fashion industry across Europe, as the cost of doing business for many factories and workshops that supply brands such as Gucci and H&M have hit through the roof amid the surge in natural gas and electricity prices. It may be noted that the EU nations’ leaders are set to hold a summit to opt for one of the proposals put forward by the member countries on how to tackle the energy crisis on Thursday and Friday.
Utility providers and energy vendors are concerned about not getting paid. They have demanded that the textile companies secure bank guarantees or come up with cash advances to cover months of expected energy bills.
Both the spinners and weavers are in big trouble at present. They consume lots of electricity to keep their operations intact. Moreover, they are unable to pass on higher costs to buyers. Many are obligated to deliver goods at prices agreed upon months earlier. And higher prices would likely prompt many fashion companies and retailers to shift their business to the outside of Europe, where energy prices can be lower.
Hanging in the balance are the textile manufacturing industry’s 1.3 million jobs across the EU.