The BGMEA is calling for payment for goods already shipped and handed over

The BGMEA is calling for payment for goods already shipped and handed over

Retailer Edinburgh Woollen Mill (EWM) has hit back at the Bangladesh Garment Manufacturing and Exporters Association (BGMEA) over its threats to blacklist the company over unpaid invoices, saying it has been unfairly targeted.

Early last week, Bangladesh's garment industry body threatened to halt production and any further orders with Edinburgh Woollen Mill (EWM) group over unpaid invoices and demands for "unreasonable" discounts, despite concluded contracts.

In a letter to owner Philip Day, whose group includes chains such as Peacocks, Austin Reed and Jaeger, BGMEA president Dr Rubana Huq said EWM was taking "undue advantage" of the Covid-19 situation and that the discounts requested are "not only impossible to grant by our members, but also in violation of local laws, [and] international acceptable standards."

However, in a response to the BGMEA on 27 May, John Herring, chairman of EWM, said he was "extremely disappointed the BGMEA has not only drafted such a letter in the first place without corroborating the facts or opportunity to comment, but also provided the letter to the media before providing a copy to the recipient".

He continued: "The EWM Group has operated in Bangladesh for over two decades, we have enjoyed an enviable reputation. During its tenure, we have not received any contact from the BGMEA on any issues, nor have [we] been contacted for comment."

He added: "We are left to question the motives of your organisation in sending such a letter. The pandemic has been affecting the globe for the last 3 months, and only now 3 months later, do you deem fit to send a letter without any verification of the facts or comment from its intended recipient."

Herring said the retailer has reached agreement with 22 out of 29 of the BGMEA's members on its standard terms of business, some of which have requested alternate terms, for which discounts have been discussed.

"We have offered the same terms to all our suppliers in Bangladesh. Your letter is not representative of the majority of your members."

Herring added: "Our group is continually looking to forge relationships with new and innovative suppliers. Our China office, as it does each year, was undertaking a simple price comparison exercise. At no point has there ever been a single suggestion that this would affect any current supplier with open orders. A fact that could have been instantly clarified if requested by your organisation.

"Throughout this process, we have worked collaboratively and constructively with our suppliers to reach conclusions that ensure that they are paid for orders, and at no point have we said otherwise. We are critical of your approach, and lack of attention to the veracity and accuracy of the data contained within your letter.

"We feel that you have unfairly targeted our group, a loyal supporter of the Bangladeshi garment industry for over two decades, when there are numerous other retailers who have significantly higher values of unconcluded orders. We can only surmise that your letter is driven by personal and political agendas.

"It is unconstructive to try and exert political pressure on UK companies that themselves are desperately trying to protect their workforces and the future of their companies. Now is the time to be constructive and find solutions that are both economically and commercially viable to ensure the long-term survival of retail supply from Bangladesh to the UK."

BGMEA response

But in another letter to Herring dated yesterday (31 May), BGMEA's Huq said the group stands by the "veracity and accuracy" of the information provided in its initial communication.

"We are aware of your contribution to the industry and Bangladesh and we were also clear that we communicated with you in the belief that during this global pandemic it was a time for all of us to unite and support each of our interests, which would help preserve and strengthen our relationship and the industry. We were also of the opinion such co-operation would avoid the criticism and allegations of big brands abandoning their partners and workers during this critical times of need and support in poor and developed countries.

"We would like to make it clear that we are no means trying to exert any "political pressure" but merely trying to preserve the interest and survival of our members, its stakeholders, the international image of the industry during this critical period and most importantly compliance with local laws and foreign exchange restrictions of Bangladesh. We also believe that our proposal is not only constructive within the framework of local laws but also economically and commercially viable to ensure the long-term survival of retail supply from Bangladesh to the UK.

"A number of international brands, which I am sure that you are aware, have come forward to support their suppliers and confirm existing orders despite the Covid-19 pandemic and we expect the same from a group such as yours, with popular and well known brands, whose founder, Mr Philip Day, was recently named the 132th richest person in The Sunday Times Magazine 'Rich List 2020' published on 17 May 2020."

Huq added: "We note with interest your comment that your group was merely looking to forge relationships with new and innovative suppliers, which is done annually; because according to our industry survey no such annual scouting of suppliers have been done in the past.

"What does concern and surprise us is that such survey was done in the midst of what you yourself have referred to as a devastating time for the fashion industry, where the priority according to your own statement is of preservation; such action by you not only defies all logic and your motive but also the sense of priority and also your lack of empathy, compassion and support for your existing suppliers, who are now not only facing the disproportionate brunt of your unilateral decisions, but potential breach of regulatory and legal consequences of your action and devastating job losses to millions."

Like many other clothing export nations, Bangladesh has suffered as brands and retailers cancelled and postponed orders due to lockdowns resulting in stores closing globally.

The BGMEA has been keeping a tally, and its current estimate suggests 1,150 factories with 2.28m workers have seen export orders worth US$3.18bn cancelled or suspended by global retailers and brands.