Apparel exporters to pressure British retailer EWM for due payments

Bangladeshi apparel exporters are going to put diplomatic pressure on British apparel empire Edinburgh Woollen Mill Group (EWM) for due payments for shipped goods and cancellations of orders to its Bangladeshi suppliers.

Apparel suppliers of the country are preparing to discuss the issue with the Bangladesh High Commission in Britain and with a number of British lawmakers.

Apparel suppliers said EWM's brand Peacocks should pay for shipped goods and take all existing stocks which were ordered by it. They claimed the brand has cancelled all previous stocks without any valid reason and has not paid for previous shipments.

Peacocks was part of the Philip Day-owned EWM fashion retail empire which collapsed in November last year.

Now, it has been bought by an international investment consortium backed by Edinburgh Woollen Mill's COO Steve Simpson.

According to Bangladesh apparel industry insiders, the discount fashion chain has played a trick to deprive its suppliers through getting liabilities write-off. But Bangladeshi factories are holding huge stocks of goods ordered by them and also have not received payments for shipped goods.

"I have discussed the issue with the Bangladesh High Commissioner in the UK to raise the issue. At the same time, we will also give a letter to the British High Commissioner in Dhaka," said Faruque Hassan, president of Bangladesh Garments Manufacturers and Exporters Association (BGMEA).

"We also asked all suppliers to give updates of outstanding payments from the Peacocks, then we will move forward," he added.

The Newly elected BGMEA President Faruque Hassan said the buyer has no right to do such unethical practice with any supplier.

Chattogram EPZ based jeans maker Denim Expert Ltd is one of Peacocks' suppliers in Bangladesh. Peacocks cancelled orders of 43,600 pieces of jeans worth over $2,26,180.

The brand has cancelled all orders already made and stocks already shipped.

"Peacocks' order cancellation hit my business hard. Some other manufacturers also suffered from its order cancellation," Mostafiz Uddin, managing director of Denim Expert Ltd.

"Now I am working with British MPs and European Commission to change the bankruptcy laws which such errant brands always resort to wipe out their debts to factories and come to business again under a new name," he added.

"We have to put concerted efforts to tame such unethical purchasing practices that are strangling the manufacturers," said Mostafiz Uddin, who is also founder and CEO of Bangladesh Apparel Exchange.

One of Peacocks' suppliers said on condition of anonymity that the brand pushed him to produce orders in November while it was still in EWM.

But later, it cancelled that order while the goods were ready for shipping.

However, after order cancellation, the brand also emailed the supplier saying they agreed to receive those jeans pants on condition of 50% discount. That was the last email from Peacocks to the factory.

The supplier said how they asked for shipping those goods as the cost of raw materials is over 80%.

Now, he is afraid of being bankrupt as he has paid all his suppliers and all the workers out of his own pocket.

He also mentioned that Peacocks' total liabilities to his company stands at over $2.6 million.

KL Design, another Bangladeshi garment exporter, claims a due payment of $438,151 to Peacocks for shipped goods last June.

According to sources, Edinburgh Woolen Mills and its subsidiary brands owe about $27 million to some 22 Bangladeshi apparel exporting companies.