Spanish retail group Inditex has suspended two suppliers after it appears that they were illegally subcontracting to the Bangladesh factory that burnt down on Saturday, killing seven people.

The fire at the Smart Export Garment factory, based in Dhaka, came just two months after 112 people lost their lives in another apparel factory fire in Bangladesh.

Labour groups say Smart Export Garment was making apparel for European retailers including Inditex's Bershka and Lefties brands, KIK Okay (belonging to the German discounter KIK), as well as New Look, Scott and Fox, and Solo Invest.

However, KIK has denied that it had any relationship with Smart Exports, or has received any evidence that orders were sub-contracted to the factory.

The cause of the fire at the two-storey factory is unknown, but more than 350 workers were at the facility when the fire broke out on Saturday afternoon.

An Inditex spokesperson said that according to information available to it at this time, two orders for the company appear to have been diverted, without authorisation, to the factory distroyed by the fire.

These orders were placed on 12 December and 17 January with Spanish supplier Wonnever. They were supposed to be manufactured by apparel firm Bangladesh Centex Textile and Apparels Limited, which had been audited in accordance with Inditex's standard procedure.

The spokesperson told just-style Smart Garments has never been among the factories authorised to produce merchandise for the Inditex Group, and it never would have been allowed to manufacture for Inditex.

While Wonnever and Bangladesh Centex deny outsourcing the manufacture of these orders, the spokesperson said Inditex has immediately severed all trade ties with both companies in light of the evidence found.

The retailer is continuing to investigate the chain of events to determine who was directly responsible for the fire, and where appropriate take legal action.

"With this decision, Inditex aims to send a clear and unequivocal message to the entire Bangladeshi garment industry: the group will not tolerate any failure to comply with the Inditex Code of Conduct's specific safety rules established to protect workers."

The retailer has dispatched teams to the area, who are providing "all possible support on the ground to those affected and to the families of the victims," the spokesperson said. The teams are also "studying how they can best provide assistance and what form such aid should take".

Inditex is also working with the International Trade Federation, IndustriALL, to implement a joint initiative geared towards securing a commitment from the textile industry in Bangladesh that would guarantee optimal workplace health and safety conditions, the spokesperson added.