Turnaround success for textile and garment companies in the COVID-19 pandemic era

This research aims to analyze the firm size, asset retrenchment, debt restructuring, and operational restructuring on turnaround success. The selected variables have taken into account that the garment industry is a labor-intensive industry and there is little formal training so that the efficiency that can be done is related to both operational and debt restructuring. These factors are important to consider to add depth to existing turnaround scenarios. The research was quantitative. Moreover, the population was Textile and Garment companies listed on the Indonesia Stock Exchange from 2017 up to 2020. The data collection technique used purposive sampling, in which the sample was based on the criteria given. In line with that, there were 44 data as the sample. Furthermore, the Altman Z-score model was used to determine the company’s turnaround status. The data analysis technique used logistic regression. The research results concluded that debt restructuring affected the probability of turnaround success. In contrast, firm size, asset retrenchment, and operational restructuring did not affect the probability of turnaround success in the textile industry. Related to the fact that the textile industry is labor intensive, a reduction in labor is synonymous with quite large severance payments, making it increasingly burdensome for a corporation. The results of this research show the need for regulatory support that favors the textile industry, especially during the pandemic, so that it can lay off employees without demands for severance pay.