Sourcing Journal
On the Line is a weekly roundup of sourcing and labor quick hits in the apparel and footwear industry, from worker protests to boardroom maneuvering, tracking the developments shaping conditions on the factory floor and beyond.
H&M order cuts in Bangladesh
H&M Group, Bangladesh’s largest foreign buyer of locally manufactured garments, is gradually reducing orders from more than half a dozen factories as part of a broader plan to scale back production, according to local media reports.
Speaking to the Daily Sun, the managing director of one affected supplier said, “We have been supplying ready-made garments to H&M for many years, but we have been informed that the buyer will begin cutting orders starting in June. We still have some orders in the pipeline.”
Another exporter said the Swedish retail giant is shifting toward India as part of a wider global sourcing pivot, raising concerns about the potential impact on Bangladesh’s garment sector.
“Our entrepreneurs have invested heavily to secure orders from H&M,” the exporter said. “Many companies operate nearly 50 percent of their factories based on orders from the global buyer. If H&M reduces its orders, many factories may shut down and a large number of workers could lose their jobs.”
H&M Group said it has been sourcing from Bangladesh since the early 1980s and continues to view the country as a “very important sourcing market,” citing long-term supplier partnerships and a strong local presence.
Faisal Samad, a director of the Bangladesh Garment Manufacturers and Exporters Association, told the Daily Sun that while buyers can adjust sourcing strategies, they should adhere to responsible business practices.
“At least one year’s notice should be given if they plan to discontinue business relations,” he said. “Buyers often impose strict compliance requirements on exporters, so they also have responsibilities.”
H&M supplier in Myanmar to shutter
More than 1,000 garment workers in Yangon’s Shwepyithar Township will lose their jobs after Kings Rich Fashion, which supplies clothing to H&M Group, shuts down at the end of June due to a drop-off in orders following the military’s 2021 coup.
“They gave us a month’s notice, claiming orders had simply dried up,” one worker told The Irrawaddy. “We will be paid compensation, but we will have to find a new job.”
H&M Group is in the process of phasing out its operations in Myanmar in what it says is a “responsible” manner in line with IndustriALL Global Union’s ACT Responsible Exit Policy and Checklist.
