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A legacy of H&M to fulfill its commitment with Bangladeshi suppliers

Bangladesh textile and apparel industry’s longtime partner H&M has stand by with the apparel manufacturers in this COVID-19 pandemic. Whereas other global brands and retailers cancelled orders or ask for discounts.

H&M-committed-Bangladeshi-apparel
Figure: H&M has honored its commitments to its supply chain partners, taking delivery of finished products and making full payment for goods. Courtesy: Bloomberg

Bangladesh RMG export is witnessing is passing by its darkest hour, as the export witnessed a 54.79% decline from March 2019 to May 2020 according to a BGMEA data.

A number of fashion brands and retailers have cancelled orders, delayed shipments, demanded discounts or deferred payments from their apparel suppliers in the repercussion of the COVID-19 pandemic.

On the contrary, the Swedish fashion retail giant has honored its commitments to its supply chain partners, taking delivery of finished products and making full payment for goods, on time, according to the industry insiders.

Ziaur Rahman, Regional Head of H&M Group for Bangladesh, Pakistan and Ethiopia recently said a newspaper, “We abide by our supply chain partners and are continuing to place orders with all of our suppliers in Bangladesh to enable them to run their units.”

H&M aims to increase its commitment to Bangladesh, as COVID-19 lockdown measures are being relaxed gradually in Europe and the USA.

“We abide by our supply chain partners and are continuing to place orders with all of our suppliers in Bangladesh to enable them to run their units.”

Ziaur Rahman, Regional Head of H&M Group for Bangladesh, Pakistan and Ethiopia

H&M is the largest RMG sourcing retailer for Bangladesh. Last year it purchased approximately $3.5 billion worth of apparel products from its 235 Bangladeshi garment suppliers. Which is over 10% of Bangladesh’s total apparel exports.

“We are planning to place more orders in Bangladesh as H&M has been working in the country for more than three decades and has developed a strong bond of confidence and trust between us and our supplier factories here,” Ziaur Rahman added.

RMG leaders have voiced their confidence in the brand.

“We have been doing business with H&M for many years and have become a trusted partner of the group,” said Fakir Kamruzzaman Nahid, Managing Director of Fakir Fashion Ltd, a concern of the Fakir Group that supplies US$150 million worth of apparel to H&M annually.

Nahid told, “During the COVID-19 pandemic, H&M took delivery of all the goods that are shipped, and released timely payments. We did not endure any order cancellations or demand for discounts from this retailer.”

“At present we have full orders as well as projections of future orders from H&M,” said Nahid.

He further added that although Bangladesh RMG sector leaders feared a sharp decline in global apparel orders but H&M has continued to place the same size of orders as in previous seasons.

Another top apparel exporter DBL Group’s Deputy Managing Director and Chief Executive Officer, MA Quader Anu said, “We are now receiving orders from H&M in line with the retailer’s earlier projections and full production of H&M garments is currently being processed through the company’s factories.”

Although globally, the largest apparel retailer, Inditex, reported a loss of 409 million euros from February to April this year. And H&M reported a loss of 559.4 million euros for the first time in decades.

Ziaur Rahman said H&M is expectant to recover the damage in the coming quarters of the year.

In response to The Business Standard, Ulrika Isaksson, Press Officer at the Communication Department of H&M Group, outlined the retailer’s strategy for its supply chain partners.

“We stand by our responsible purchasing practices and contractual agreements. We take delivery of and pay for already produced goods, as well as goods in production, if delivered within a reasonable timeframe. We are fulfilling all payments to our suppliers on time. Even if suppliers offer discounts, we pay the original agreed price, without any re-negotiations,” Ulrika said.

“We want to support a viable industry going forward and are acutely aware that garment workers are extremely vulnerable in this situation. The H&M Group is therefore in close dialogue with several partners and industry stakeholders to see how we can and should support with the aim of finding a joint industry solution,” Ulrika Isaksson added.

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