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BGMEA admits claims about Edinburgh Woollen Mill unpaid bills are false

Lauretta Roberts
07 October 2020

The Bangladesh Garment Manufacturers and Exporters Association (BGMEA) and has admitted that recently circulated claims that the Edinburgh Woollen Mill Group had left its members with unpaid bills of nearly £27m were false.

Yesterday it emerged that the chairman of EWM, John Herring, had written to the president of BGMEA demanding a retraction of the claims saying they jeopardised the fashion retail group's credit lines and the future of its 24,000 employees.

It was understood that the board of the business, which owns Peacocks, Jacques Vert, Jaeger and Austin Reed, was meeting today to make a decision on whether to pursue legal action against the association, having received no reply to its requests for a retraction.

However, BGMEA president Dr Rubana Huq has now written to Herring conceding that the group had "paid suppliers to a considerable extent" but claimed some raw materials were still with suppliers, and the association was contacting members for an updated outstanding figure.

While the BGMEA claimed it had not been seeking to cause problems for EWM, Herring is believed to have described its actions as "effective sabotage".

EWM recently carried out a valuation process for the Peacocks chain with a prominent US investor interested in the business; it has also received unsolicited approaches for its heritage brands, which include Jaeger and Austin Reed. Claims of unpaid debts of such a significant amount were believed to be straining relationships with credit insurers and putting any deals in jeopardy.

In his reply to the admission the the figure was wrong – in Huq's reply she referred to the amount in question as dollars rather than pounds which had previously been quoted – Herring reportedly said: "[...] the lack of knowledge and contempt to the facts demonstrated in your reply is completely unacceptable for a trade organisation representing hundreds of thousands of workers and the largest industry contributor to GDP in Bangladesh."

A well placed source said of the matter: "The BGMEA President's foolhardy attitude shows an absolute devil-may-care disregard for the company and the 24,000 people it employs. Do they not understand that pushing out huge figures like this could bring the whole company down? It's reckless."

EWM is now pushing the BGMEA to issue a clear statement admitting that the figure published was incorrect and that it hand over the statement issued to press with the figure on it in order that the company can have the opportunity to correct it.

It has also demanded an investigation into the BGMEA and the circulation of the false figure, which it said the association knew would be damaging.

The BGMEA represents around 4,500 ready made garment (RMG) manufacturers in Bangladesh and the RMG industry is the single biggest export earner for country accounting for 83% of total export earnings.

It has been vocal in its criticism of Western fashion brands who pulled orders from its members as the COVID crisis hit and stores around the world were forced to close. Many brands and retailers went on to negotiate payment terms with suppliers with some paying in full for orders made or in progress, others requesting discounts and some contributing to staff wages among other solutions.

 

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