Bangladesh: suppliers bear the brunt as Debenhams enters into administration, demanding 90% discount on completed orders
“British upscale brand Debenhams leaves its Bangladesh apparel suppliers high and dry”, 05 May 2020
[Debenhams] which used to purchase more than $120 million worth of mainly high-end garment items from 40 manufacturers in Bangladesh in a year, has now demanded … a 90 per cent discount…
Currently, Debenhams, which has appointed an administrator last month, its second in the past year, owes a staggering $66 million to its vendors in Bangladesh.
Of the amount, garment items worth $26 million is lying in the UK ports and another $40 million is in the factory floors ready to be shipped.
"We are uncertain about receiving payment from Debenhams as the company has appointed administrators," said Alam, also the managing director of Design Source.
Demanding a 90 per cent discount from the suppliers is abnormal. Many small and medium scale factories will not be able to sustain such a big blow to their business.
Moreover, if the UK court declares Debenhams as bankrupt, it will take at least five years to get any money, by which the local suppliers will crash and burn.
Meanwhile, Debenhams has already laid off all 69 employees in its Dhaka office…
The termination of the employees is illegal because the move does not follow the agreements that were signed with the Bangladesh Investment Development Authority.