Bangladesh Clothing Suppliers Lost $3.7 Billion From Pandemic
The pandemic hit Bangladeshi clothing suppliers and the country’s overall economy hard when British fashion retailers had to shut down, a report from The Times said.
The garment sector is the largest part of the country’s economy, representing over 95 percent of it, the report stated. The total canceled globally came out to $3.7 billion, according to the Bangladesh Garment Manufacturers and Exporters Association. That number came from 1,931 global fashion brands nixing their orders.
Non-essential stores were forced to close in March, and canceled orders from fashion retailers totaled 730 million pounds (about $984 million), according to the report. Many of the retailers had just then taken their spring and summer collection deliveries.
Data from Traidcraft Exchange showed that U.K. suppliers, with the most prominent being Primark, Mothercare and Debenhams, had canceled $1 billion in Bangladesh orders by June, the report stated. By comparison, the U.S. canceled $500 million, and German, Swedish, Dutch, French and Spanish retailers that canceled $100 million each.
There has been some initiative to help get things back on track, The Times reported, with Marks & Spencer, Tesco, Inditex and H&M committing to pay in full for orders completed and in production. Primark, meanwhile, rescinded its opposition and said it would pay for all outstanding orders.
That said, Traidcraft clarified that it still wasn’t clear exactly when that would happen. The organization said retailers had demanded suppliers delay their shipments until the next season. That, according to the report, would make the companies incur extra warehouse costs.
The pandemic forced many businesses to make a shift in operations toward a B2C or a direct-to-consumer (D2C) model. Steve Denton, CEO of Ware2Go, told PYMNTS that the shutting down of many stores during the initial part of the pandemic made it necessary for clients using distribution channels to find new ways to get their materials out.