Masks, masks, and more masks: high end brands dedicate factories to PPE as tech giants scramble to stop price exploitation

While countries around the world continue to battle COVID-19 despite a shortage of personal protective equipment (PPE), high-end fashion retailers have started to assist by producing PPE for their local communities and the world as a whole.

In the United States, only seven states have held off on enacting a “shelter in place” or “stay at home” order insisting that all nonessential workers stay at home and leave only for very specific reasons.

This rule doesn’t apply only to individuals. Businesses that are deemed non-essential, such as retail stores, have also been required to close.

Prior to the pandemic, much of the retail industry was already struggling. However, the outbreak has forced legacy brands such as Macy’s and Kohl’s to lay off 125,000 and 85,000 of their employees. As a result, these fashion brands have turned to producing masks to try and insulate themselves against the economic hit.

By producing masks, fashion companies can then garner “essential” business status, allowing them to continue operations. Furthermore, their essential status will put them in the running for hefty government contracts with the Department of Veteran Affairs, the Department of Defense and the Bureau of Prisons, which are all posting requests for vendors online.

On the local level, on March 22, New York asked businesses to submit proposals to provide the city with PPE and reportedly received 460 queries in the first 24 hours.

Hundreds of millions of dollars have also been appropriated at the federal level for private corporations to produce PPE. As a result, companies are being highly incentivized to shift their focus to producing PPE in order to keep cash flow flowing, cover costs, keep their supply chains and maintain employees on their payrolls.

However, these contracts for PPE operate independently from the Defense Production Act, which “allows the president, largely through executive order, to direct private companies to prioritize orders from the federal government.”

The Defense Production Act also allows the president to “allocate materials, services, and facilities” for national defense purposes, and take actions to restrict hoarding of needed supplies.” So far, President Trump has only invoked the Defense Production Act on a limited basis, specifically on directing companies like GE to produce ventilators.

American Giant, a San Francisco based apparel company, was one of the first to land a contract. Speaking to Marker on March 25, American Giant’s chief executive officer, Bayard Winthrop, said, “About a week ago, we decided to stop manufacturing apparel, and start making medical masks.”

Winthrop went on to say that American Giant’s plants would be dedicated entirely to the production of medical masks and that their expenses would be covered by the federal government.

A shutdown order was then issued to American Giant on March 30 with Winthrop admitting that the manufacturing firm was striving to obtain the essential manufacturing label in order to keep operating, clarifying, however, that while “It’s nice to be able to keep people employed in the factories,” doing so wasn’t “the motivation for making masks.”

Etsy, an online marketplace, published a press release on April 7 stating that “over the weekend (April 4-6), buyers searched for face masks on Etsy an average of 9 times per second, over 2 million searches.”

The statement added that, “over the past week, we’ve sold hundreds of thousands of face masks per day.” The statement also reported that “face mask” was the most frequently searched term on their platform over the past two weeks.

Meanwhile, eBay has implemented a ban on all sales of face masks, hand sanitizer and disinfectant wipes on all new and existing listings to try to prevent “unfair pricing behavior” for buyers on the platform.

Facebook is also temporarily banning face mask listings.

Rob Leathern, Facebook’s Director of Product Management, announced on Twitter that Facebook is “monitoring COVID19 closely and will make necessary updates to our policies if we see people trying to exploit this public health emergency.”

However, not everyone has bought into the hype.

The Texas based Prestige Ameritech, “the largest domestic manufacturer of surgical masks and respirators in America,” has no intention of increasing its volume.

While the manufacturing firm has upped its production to 600,000 masks a day, CEO Mike Bowen announced that the company has no intention of increasing beyond that number, claiming that after the outbreak is over, those in search of masks will look to acquire cheaper masks from China.

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