EWM spokesperson says BGMEA and BKMEA’s approach has been ‘unproductive and uncollaborative’
The Edinburgh Woollen Mill (EWM) Group has responded to Bangladeshi apparel trade bodies’ threats to place an embargo on business and to potentially blacklist Peacocks, Jaeger, Bonmarché, and other brands owned by EWM, unless they pay their outstanding dues to their suppliers in Bangladesh.
The high street retail empire has said the associations’ approach has left it with a very bitter taste in their mouth and insisted it has been engaging with suppliers with “the best of intentions,” reported inews.co.uk on Saturday.
The group’s response came after Bangladesh Garment Manufacturers and Exporters Association (BGMEA) and Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA) on Thursday sent a letter to EWM CEO Philip Day, saying they received several complaints from suppliers about unreasonable discounts and non-payment of dues for the brands of EWM.
Edinburgh Woolen Mill Limited is the parent company of Peacocks, Jaeger, Austin Reed, Jacques Vert, Country Casuals, Windsmoor, Baumler of Germany, Bonmarché, and Ponden Home.
An EWM Group spokesman said the company had not received the letter until after it had appeared in Bangladeshi media and that it was the first time it had been contacted by BGMEA and BKMEA.
"We are left with a very bitter taste in our mouth over the sincerity of this letter,” he said. “We think their approach has been unproductive and uncollaborative.”
He said conversations with the vast majority of its suppliers have been positive, and added: “They have understood that we are trying to find a balanced way forward that matches the immediate, urgent challenges faced by high-street stores nationally and those of suppliers.”
EWM said it had already paid for the majority of future stock when the Covid-19 crisis hit, but is now talking to manufacturers about the remainder, said the inews.co.uk report.
The company's spokesman said: "We have looked at literally every option on the table and worked hand-in-hand with all our suppliers to find solutions, but we also need to recognise that these are difficult and complicated issues.
"There are not simple problems, and every potential quick solution has long-term implications. If we took delivery of remaining unmade stock for the spring season with all our stores closed, this stock would only be stored for next year and depress 2021 orders."
According to the BGMEA, EWM has so far cancelled orders worth $8.22 million (£6.76 million) across five factories. It is understood that EWM has reached agreements with suppliers on more than half of this total, with about $2-3 million yet to be settled.
Buyers demanding unreasonable discounts
BGMEA President Rubana Huq said in her letter to EWM that certain buyers have been taking advantage of the coronavirus situation by demanding unreasonable discounts.
She also asked EWM owner Philip Day to settle dues by May 29, or otherwise face an embargo on doing business in Bangladesh.
The letter said that the discounts are not only impossible to grant by BGMEA members, but also in violation of local laws and internationally acceptable standards.
“It should be noted that the demand for the discounts will not only be financially catastrophic, but will also expose our members to various claims and liabilities from regulations, banks and other third parties, which will eventually legally implicate the buyers themselves,” it added.
The associations have taken a strong stance on the matter in the interest and survival of its members, stakeholders, the international image of the industry, and more importantly, compliance with local laws and foreign exchange restrictions.
However, EWM’s spokesman said the BGMEA was trying to invalidate the “productive” discussions it has held with its suppliers and claimed some of the association’s members disagreed with its approach, “which appears to be putting media noise and tactics above engagement, discussion and solutions.”