"Global fashion brands cut Bangladesh orders after turmoil", 15 August 2024

Top international fashion brands are shifting orders away from Bangladesh because of the turmoil that surrounded the fall of authoritarian Prime Minister Sheikh Hasina, according to manufacturers in the world’s second-largest garment exporter.

Factories were shut for days after Sheikh Hasina’s government brutally cracked down on student protesters...Multiple factories owned by regime loyalists, including suppliers to global brands such as... H&M and...Zara, were torched in retaliatory attacks.

The weeks of violence...have delayed deliveries of clothes and shoes for the winter retail season in Europe and North America.

Factories have resorted to working overtime and flying products by air, an expensive option that has wiped out profits for the deliveries, in order to make up a backlog that stretches as far as a month.

Bangladeshi exporters said some major brands had shifted orders for upcoming seasons to rival south-east Asian suppliers, disrupting existing global supply chains and threatening the economic backbone of the country of 170mn.

Factories “received calls from Spanish buyers, German buyers: ‘For the time being, we’re diverting 40 per cent of our orders to Cambodia or Indonesia,’” said Mamun Rashid, an adviser to garment manufacturers in Bangladesh. “They didn’t know how long this turmoil would continue.”

Syed Nasim Manzur, managing director of Apex Footwear, which supplies...Decathlon and Uniqlo’s...parent Fast Retailing, said the upheaval had “led to a real shaking of confidence” in Bangladesh among international brands.

“Large groups are saying they’ll reduce their sourcing by 30 per cent for the next season,” said Manzur, who is also president of Bangladesh’s leather goods and footwear exporter association. “We need to make sure that confidence is restored.”...

Authorities have created a new industrial security task force and deployed the army to guard factories...

Salman F Rahman, a former industry adviser to Sheikh Hasina and co-founder of Bangladesh’s Beximco Group, was arrested in Dhaka...after allegedly trying to flee the capital in disguise.

A...factory run by Beximco, which says on its website its clients have included H&M and Zara, was attacked by anti-government protesters last week. On Tuesday, the sign outside its main gate was still partially torn down and piles of ash remained on the charred floor of its burnt-out reception area.

H&M declined to directly comment on whether it was shifting orders, but said it welcomed the “steps taken for greater stability” in Bangladesh and that factories there were “gradually opening again”.

“We have also expressed to our suppliers that we would not seek any discount due to delays that might happen under the current circumstances,” the Swedish clothing group said.

Uniqlo declined to comment on whether it was shifting orders away from Bangladesh, but said it did not cancel them “without a factory’s prior consent”. Zara and Decathlon did not respond to requests for comment...