Edinburgh Woollen Mill (EWM) Group has not settled the cancelled orders of work-in-progress (WIP) goods although it has already paid a significant portion of the outstanding amounts that were owed to its suppliers in Bangladesh, according to sources.
On 5 October, the Bangladesh Garments Manufacturers and Exporters Association (BGMEA) wrote to EWM, urging it to settle all payments, including the WIP issue.
The BGMEA will ask its members to give the trade body an updated figure of their unpaid bills, said the BGMEA's top officials.
Earlier on 30 September, the British clothing retailer, in a letter to the BGMEA, disputed the BGMEA's claims EWM owes Bangladeshi suppliers £27 million.
The company told the BGMEA that these "old figures are completely baseless and without any merit."
An EWM spokesman said, "To the best of our knowledge, all outstanding amounts that were owed to suppliers in Bangladesh have been settled or agreed. They are categorically false, and risk putting our business in serious jeopardy," reported Drapers, a British news portal.
However, talking to The Business Standard, a number of suppliers discarded EWM's claim that all outstanding amounts had been settled.
In response to the letter, the BGMEA, said "The EWM has paid their suppliers to a considerable extent but a few EWM suppliers still have raw materials which were booked and are still to be lifted. The total figure of outstanding is less than $28 million and we will ask our members to give us an updated figure."
To reiterate, there are still unpaid bills as well as missing renewed contracts for WIP goods, it added.
"The BGMEA has never had the intention of causing trouble to any of their customers, but we cannot ignore our responsibility towards our members," said the BGMEA's President Dr Rubana Huq.
Meanwhile, EWM Group is considering launching legal action against the BGMEA, accusing it of jeopardising its business's future, reported inews, a UK-based news portal.
These reports of unpaid bills have reportedly spooked EWM's credit insurers – who provide cover for suppliers should a company be unable to pay its bills – making it more difficult for new suppliers to get coverage, according to the letter.
According to inews, the company's board was scheduled to meet on 7 October to discuss whether to launch legal action against the BGMEA over its claims.
EWM Group – which also owns brands such as Peacocks and Jaeger and employs 24,000 people – is one of several British retailers that found itself locking horns with BGMEA in recent months, as initial novel coronavirus lockdowns caused several high street shops to cancel orders or renegotiate terms with suppliers.
In May, EWM hit back at the BGMEA after the company was told not to ask for discounts from garment-makers, calling the organisation's approach "unproductive and uncollaborative."