The Business Standard 1 September 2020
Bangladesh’s apparel exporters are updating the list of orders cancelled by western buyers amid the Covid-19 pandemic, after the US government assured them assistance in realising dues from American buyers.
The assurance came at a virtual meeting of the United States-Bangladesh Trade and Investment Cooperation Forum Agreement Council on Wednesday.
Responding to a query on Saturday, Bangladesh Garment Manufacturers and Exporters Association’s (BGMEA) First Vice President Mohammed Abdus Salam said, “We are working on making an updated list of western retailers and brands that canceled or suspended orders.
Salam who also serves as the managing director of Chittagong Asian Apparels Ltd – a Chattogram based apparel exporter – added, “The updated list will be shared with the US Trade Representative (USTR) through the Ministry of Commerce within the next week.
“We are making this move because a number of US retailers have filed for bankruptcy after canceling their ready or in-production orders without paying.”
Apparel exporters said about 75 to 80 percent of the canceled or suspended orders have been restored, and that may have positively impacted their export earnings since July.
Some of the US-based retailers who filed for bankruptcy are JC Penney, Ascena, Sears, Kohl’s, The Children’s Place, Hertz, Ross, TJ Maxx and Urban Outfitters Inc.
Besides, a number of US brands and retailers have demanded steep retroactive discounts or protracted payment terms to their Bangladeshi suppliers, and some of them did not respond to their suppliers after receiving shipments of ready goods during the pandemic, said sources.
Most retailers have studiously ignored the growing public backlash as exemplified by the #PayUp social-media campaign.
Commenting on the issue, Combined Apparels’ Managing Director Rakibul Alam Chowdhury said, “Around 19 Bangladeshi apparel suppliers had filed a case against the American buyer Sears Holdings after it refused to settle millions of outstanding debt.
“After we filed the case, Sears wanted to pay us $5 million out of $24 million, and offered to pay the rest of the dues step by step. But we did not accept their proposal as yet.”
Among other US based retailers, Kohl’s cancelled or suspended purchase orders worth $54 million, Gap Inc 38 million, JC Penny 35 million, Walmart $19 million, Ralph Lauren Corporation $10 million from Bangladesh amid the pandemic.
The hundred-year-old US retailer JC Penney filed for bankruptcy on May 15 to avoid liquidation accelerated by the global Covid-19 crisis. Industry insiders said the JC Penney sources about $300 million worth of goods from Bangladesh annually.
In February, the British retail giant Debenhams also filed for bankruptcy, which has about $69 million liabilities to its 35 Bangladeshi suppliers.
In May, the BGMEA threatened to blacklist British clothing retailer Edinburgh Woollen Mill (EWM) for not paying Bangladeshi suppliers.
EWM Group, owned by British billionaire Philip Day, has quite an impressive array of brands under its fold – Peacock, Jaeger, Austin Reed, Jacque Vert, Country Casuals, Windsmoor, Baumler of Germany, and Bonmarche & Ponden Home.
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