TJMaxx yet to clear dues of Bangladeshi suppliers | The Daily Star
12:00 AM, August 12, 2020 / LAST MODIFIED: 02:09 AM, August 12, 2020

TJMaxx yet to clear dues of Bangladeshi suppliers

News of garment work order cancellations and holdups and deferred payments became commonplace when pandemic struck.

But over time, the brands and retailers came to an understanding with their suppliers, with some reinstating orders or paying what it owes.

One retailer that has fallen foul of ethics is TJMaxx, one of the largest clothing retailers in the US.

It has not been paying its Bangladeshi suppliers their dues, although its parent company paid a substantial amount of dividend to its shareholders during the pandemic.

The TJX Companies, the parent company of TJ Maxx and Marshalls that also got US government credit for COVID-19, distributed $480 million to its shareholders recently.

TJMaxx has been sourcing garment items from few Bangladeshi factories and it has cancelled work orders with them using the proverbial excuse of a drop in sales and closure of stores during the pandemic.

It pushed to reopen stores amidst the pandemic in May, which led to reopening of 85 per cent of its stores by mid-June. It even had more sales in May than last year.

"So far, two local suppliers said that TJMaxx cancelled work orders with them because of the pandemic," said Faisal Samad, vice-president of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA).

The company cancelled work orders of 12,000 units of garment items worth $ 85,950 and held up payment for 17,700 units of garment work orders worth $125,000 with another local supplier.

"We don't have information on how many of these cancelled goods been reinstated," Faisal Samad told The Daily Star over the phone yesterday.

Samad, however, said more local suppliers may supply goods to the TJMaxx, but so far, the BGMEA has the information on two suppliers.

A senior official of one of the suppliers seeking anonymity said recently the TJMaxx has reinstated the cancelled work orders as the amount was not too high. The Daily Star could not contact the other supplier.

TJMaxx's net sales in the first quarter of its 2021 financial year stood at $4.4 billion. Stores were closed for half of the quarter for the pandemic, according to a press release of TJMaxx.

"The company is confident that it currently has sufficient liquidity for the remainder of the year," it said in the press release.

"Although it's still early and the retail environment remains uncertain, we have been encouraged with the very strong sales we have seen with our initial reopening," said Ernie Herrman, chief executive officer and president of The TJX Companies.

And yet, the company is not paying its suppliers in Bangladesh.

Contacted, Erika Tower, vice-president of global communications of TJX, said: "We appreciate your interest. That said, at TJX we take a quiet approach and wouldn't have anything to add to your story. We hope you understand."

Meanwhile, Samad said 45 per cent of the cancelled work orders have been reinstated with the reopening their stores in the Western world.

"Now we are also receiving new work orders and we are getting them ready to ship from November to catch the Christmas season," Samad added.

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