Second wave of cancelled orders a new threat to Bangladeshi fashion factories

11 Nov 2020 10:07 AM
Image: Collected
Amid the next wave of the Covid-19 pandemic and new lockdowns, major western buyers are again suspending Bangladesh apparel orders, threatening factory operations.

Retailers that have suspended orders include H&M, C&A, Aldi and Inditex, according to exporters.

“Some buyers have held existing orders, although some have delayed positioning new ones,” said chairman of Evince Group Anwar-ul Alam Chowdhury.

He said western buyers had been primarily confident that clothes sales would improve by Christmas.

“But as the virus begun spreading severely, resulting in lockdowns, they are actually in shock and also have become sure the Christmas market won’t be needlessly to say,” said Mr Chowdhury.

Poor buying trends have meant goods made and supplied during the pandemic were still in western stores, he said, therefore the most buyers have held new orders back.

“The impact of the second wave of the pandemic is evident in the export figures for October,” he said.

Former president of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA) Siddiqur Rahman told The Loadstar buyers “are observing what's happening”.

He said factories were continuing production on orders already placed.

“But we can’t say now what is going to happen in the coming weeks,” said Mr Rahman.

Primark, meanwhile, has honoured all orders located with suppliers. Its owner Associated British Foods said the other day that Primark stores representing 57% of its selling space in Europe would close temporarily, with a loss for the period of closure of £375m.

Through the first wave of the pandemic, the major retailers either suspended or cancelled work orders in Bangladesh worth $3.18bn. Many factories stopped production and a large number of garment workers lost their jobs. In April, only $520m-worth of apparel was exported, a record decline.

But many factories didn't reopen in the absence of work orders, even though many big factories are running production at less than their capacity. And, because of the disruption, Bangladesh lost its second place global ranking as a worldwide apparel supplier to Vietnam.

The government of Bangladesh offered a Tk50bn ($589m) pandemic recovery package for export-oriented industry to provide wages to staff for 90 days. Later, another Tk15bn package was announced for jobless personnel in the apparel, leather and footwear industry.

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