Global brands promise to stand by apparel suppliers
At least 15 international apparel retailers and brands have so far assured Bangladesh's garment manufacturers that they will accept shipments of products that were previously ordered, in an effort to help the country's exporters deal with the coronavirus fallout.
The retailers and brands are: H&M, Inditex, PVH, Target, Kiabi, M&S, C&A, Tom Taylor, KappAhl, Benetton, Decathelon, Primark, Puma, Tesco and Kontoor.
They are currently finalising the terms and conditions of previously submitted work orders.
However, the total size or value of their orders could not be ascertained.
DBL Group, a leading garment exporter whose biggest buyers include H&M and Puma, has been assured by the two international retailers that they will not cancel work orders placed earlier, said DBL's Managing Director MA Jabbar.
"I hope the rest of my buyers will contact me next week. We are positive that the buyers will stand by us in this critical time," Jabbar told The Daily Star over phone.
Ever since the coronavirus outbreak began, many western apparel retailers—who had been sourcing products from Bangladesh for decades—sent letters to the local manufacturers, seeking cancellation of current and upcoming work orders.
This is because, amid nationwide lockdowns to curb the spread of the deadly virus, their stores are closed and demand has collapsed.
At the same time, many retailers and brands stood by garment manufacturers who have been adversely impacted by order cancellations and delayed shipments.
"We welcome their decision to support us and hope that payment terms will remain unaffected in order to ensure liquidity flow for the factories," said Rubana Huq, president of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA), in a WhatsApp message last week.
Huq issued the response after Swedish retail giant H&M last week assured apparel suppliers that it would accept orders which were already manufactured.
"At least six of my long-term buyers contacted me to receive the orders," said Mahmud Hasan Khan Babu, managing director of Rising Group, a leading garment exporter.
"I am trying to continue production in the factories, but the situation is not good. Moreover, most Western buyers have already shut down their stores," he said, adding that the buyers' response at this critical moment is definitely a positive sign.
For instance, French buyer Kiabi told Rising Group during a video conference last week that it would take previously placed orders worth nearly $14 million.
Rising Group has been supplying knitwear items like T-shirts to Kiabi for more than nine years. The French company purchases nearly $120 million worth of garment items from the Bangladeshi manufacturer every year.
Kiabi has been annually sourcing various Bangladeshi garment items worth $700 million for the past 20 years, Babu said.
As of yesterday, export orders amounting to $3.02 billion have been cancelled by international retailers, according to data compiled by the BGMEA.
About 1,104 garment factories have reported a combined loss of 946.90 million units of work orders. This will affect 2.19 million workers in the country.
Very few factories were in operation yesterday even in production dense areas like Ashulia, Savar, Gazipur, Chattogram, Tongi, Maona, Narayanganj and Narsingdi.
Garment export fell by 26.70 per cent year-on-year to $1,972.24 million in March this year, according to BGMEA data.
The countries worst hit by coronavirus, such as Italy, the UK, the US, France, Spain and Germany are prime destinations for Bangladeshi garment exports.
The US alone is the single largest export destination for Bangladeshi garments, importing about $6 billion worth of apparel items each year.
Germany is close behind with slightly less imports.
Bangladesh exports nearly $3 billion worth of garment items to Italy and more than $2.5 billion to Spain and France each year and over $3 billion to the UK.