Need to avoid the one-way business interests-Rubana Huq
Camaïeu was founded in northern France in 1984, was active in 21 countries and operates nearly 900 stores, of which 650 are located in France. Last March, Camaïeu announced it wanted to downsize its international operations by closing down 135 stores located outside its domestic market by the end of 2020 – in Italy, Poland and the Czech Republic, among other countries.
After that on 26th May suddenly they declared about receivership. Then the Finance Minister Bruno Le Maire said on 27th May that French Govt. is looking for a buyer to rescue clothing and fashion company Camaieu, which was facing financial difficulties due to the hit to business from the coronavirus. They last communicated with vendors on 11th August.
Camaïeu’s management added that the initiative was partly prompted by the fact that Camaïeu was refused a state-backed loan (PGE), which it applied for to navigate the Covid-19 crisis.
“Obtaining a PGE would have enabled them to deal with the crisis and bolster their financial position. Despite the regional authorities’ and the government’s endorsement, and that of Camaïeu’s shareholders, the loan application was refused, making it impossible for the company to deal with the liquidity crisis.”
Due to the financial crisis they declared on 17th August that a new company is taking over the company with that they also confirmed that all the due payments of the vendors will be made on time.
But at this time the new company is unwilling to payup. Even they have closed their local office. The total arrears of the vendors are $15.68 millions.
In a response of the case, Rubana Haque, President of Bangladesh Garment Manufacturers and Exporters Association (BGMEA) asked that Why would the vendors suffer for the fault of the company and also added “having BGMEA representatives in Europe would support the business relations and of course the growth of textile business by several actions.”
Now it’s necessary to take legal actions by strong negotiations and to create pressure by using media. Moreover need to avoid the one way business interests, she added.
Michael Wolff, Business Consultant at Mfw Management Services, advised to take action for ending the one way business interests serving process. He said, “Very sad once again but Bangladesh has lost control of financial proprietary by allowing open terms to customers who quite frankly don’t deserve it. When I started buying from Bangladesh 25 years ago a good LC was needed or there was no supply.”
“Somehow open terms has become the norm despite most retail being effectively relying on their creditors to finance their own ridiculous (in some cases) over expansion. These red brick retailers are in real trouble as are the large volume basics orders that were so attractive to your factories there is a real risk to the stability of the nation as the business model that has driven the country forward cracks and flounders,” he added.
Some industry people said, “We have to frame a strong payment strategy for our overseas business by using recent worse experience we faced with fraud western companies.”