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Global apparel major H&M to not seek discounts from Bangladeshi suppliers

Bangladesh, alongside China, is the largest production market for clothing for the group

H&M

Akshara SrivastavaShreya Nandi New Delhi

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Amid the ongoing political crisis in Bangladesh, global apparel brand H&M said on Wednesday that it is continuously monitoring the developments in Dhaka, and will not seek any delay-related discounts from the suppliers based in the country.

“According to the latest information, most of the factories are gradually opening up again, and safety remains a priority. We have expressed to our suppliers that we would not seek any discount due to delays that might happen under the current circumstances. We continue assessing the situation daily,” a company spokesperson said.

Bangladesh and China are the prime hubs for producing clothing for H&M.
 

“We are maintaining a close dialogue with our business partners and other stakeholders, and we welcome the steps taken for greater stability in the country,” the spokesperson added.

According to the Confederation of Indian Textile Industry (CITI), several major global brands that rely on Bangladesh for their sourcing needs will be affected. Brands with significant portions of their supply chains rooted in Bangladesh may experience delays and a decrease in the availability of their products. This, in turn, could lead to a ripple effect across the global retail market, hitting inventory levels and sales.

Inditex, which owns brands like Zara and Bershka, has significant manufacturing clusters in the country. According to its 2023 annual report, the group had 150 suppliers with purchases in the year, with 273 sewing factories associated with purchases, and a total workforce of 965,797 associated manufacturers.

However, an email sent to the company did not elicit a response.

“Bangladesh’s growth in the textile sector has been inspiring and has lent strength to the trade flows in the subcontinent. While we are concerned about the impact on the supply chain and the potential delays and disruptions it might cause, we are hopeful that the situation will improve soon,” Chandrima Chatterjee, secretary general, CITI said.

The Apparel Export Promotion Council chairman Sudhir Sekhri said buyers are concerned because of the escalation of civil unrest in Bangladesh.

"In the short term, fast fashion buyers have no option but to pull out their orders from Bangladesh and place them elsewhere," Sekhri said.

Most of these orders are in man-made fabrics, purchased from buyer-nominated sources in China, Korea, and Europe.

Shifting these short-delivery orders using special imported fabrics to India is not viable, given India’s current import policies. Only orders in fabrics of Indian origin are expected to be shifted to Indian factories, he added. 

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First Published: Aug 07 2024 | 8:08 PM IST

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