Apparel manufacturers are suggested to immediately contact the administrator and initiate diplomatic engagements over realising their outstanding payments
The fall of British fashion chains Peacocks and Jaeger into administration has worried their Bangladeshi apparel suppliers with a large outstanding amount – claimed to be at least £27 million – owed to the suppliers remaining unsettled yet.
"Many retailers are going bankrupt due to the pandemic fallout. And Edinburgh Woollen Mill (EWM) Group, the owner of the brands, -- just followed suit," said Siddiqur Rahman, a former president of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA).
The former BGMEA president termed the collapse as very concerning, as he thinks that appointing the administrator is likely to further delay payments to suppliers.
"EWM was already unwilling to pay the dues," Siddiqur added.
He advised the local suppliers of immediately contacting the administrator and initiating diplomatic engagements.
"We should engage our mission in the United Kingdom as well as British High Commission in Dhaka to realise the money," he noted.
On Friday, fashion chains Peacocks and Jaeger fell into administration as the owner Edinburgh Woollen Mill Group failed to find a buyer for both businesses.
EWM Group blamed the pandemic for a collapse in trade, but said it was still in talks with potential buyers.
"In recent weeks we have had constructive discussions with a number of potential buyers for Peacocks and Jaeger," it said in a statement.
"But the continuing deterioration of the retail sector due to the impact of the pandemic and second lockdown have made this process longer and more complex than we would have hoped."
Nasir Uddin Ahmed, managing director at NZ Group and also a supplier to Peacocks, said, "We have $2 million worth of work orders with EWM brand. Of them, garment goods worth $1 million are ready for shipment. But, we will halt it as they have fallen into administration, which may make the payments uncertain."
Nasir said they had also procured raw materials for the rest of the orders.
"We sent an email to Peacocks Friday asking them about the next course of action. But they are yet to respond," he added.
On 5 October, the BGMEA wrote to EWM urging it to settle all payments. 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.