The KOA Modas shutdown and its lessons for investors
- Manual: opening a garment factory
- Precedents: who came, and what happened
- Audited
KOA Modas (Korean capital) closed in February 2025 without paying severance to more than 750 workers; an investigation by the Worker Rights Consortium documented forced overtime, abuse and the suppression of union activity. The workers recovered about US$6 M: Sae-A Trading, the buyer acting on Target's behalf, contributed US$3.3 M as a "humanitarian contribution" and Target ended the relationship (figures verified in audit against BJournal and CNN). The context is a strong historical presence of Korean capital in Guatemalan apparel (PRONACOM); CNN's 2025 report documents the model and its labor tensions. The dossier's lesson: unpaid labor liabilities turn into international litigation that reaches the whole chain — trading company and brand alike — and the model that produced Koramsa (scale, speed, dependence on one or two US brands) collapsed in 12 months when demand fell; accruing severance is not optional in practice.
The research is written in English; quoted figures, source names and the titles of legal instruments stay in the language their source published them in.
Figures
- Workers affected by the KOA Modas closure
- >750
- Amount recovered by the workers
- ~US$6 M
- Sae-A Trading contribution
- US$3.3 M (humanitarian contribution)
Caveat
Sources
Organizations named in the answer
Related records
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