Edinburgh Woollen Mill Group (EWM) is considering legal action against the Bangladesh Garment Manufacturers and Exporters Association (BGMEA) over what it says are false claims that it owes money to Bangladeshi garment factories.
Recent claims in the media that the fashion retail Group, which is the parent of Peacocks, Jaeger and Austin Reed among others, owes £26.7m in unpaid bills to BGMEA members are “baseless and without merit” its chairman says.
EWM chairman John Herring has written to the BGMEA president Dr. Rubana Huq to urge the organisation to retract the claims.
A spokesperson for the group said: “To the best of our knowledge, all outstanding amounts that were owed to suppliers in Bangladesh have been settled or agreed. Old figures that have been recirculated are completely baseless and without any merit. They are categorically false, and risk putting our business in serious jeopardy.”
In his letter Herring is understood to have claimed that the recirculation of the out-of-date claims could affect the company’s credit lines, its relationship with credit insurers and the future of its 24,000 employees.
It is also claimed that suppliers to EWM, who are also members of the BGMEA, have written to the retailer to express concern about the claims saying that “any damage done to EWM Group… would be catastrophic both for us and the Bangladesh RMG [ready made garment] industry as a whole“.
It is understood the board of Edinburgh Woollen Mill group is meeting tomorrow to decide whether to pursue legal action against the BGMEA, which has yet to respond to the letter.
The claims centre around orders cancelled or paused as a result of the COVID-19 crisis. Many global retailers pulled contracts from Bangladesh and other countries to avoid clothes piling up unsold as stores remained closed. Retailers took various different approaches to payment and compensation to suppliers with some retailers paying bills in part or full (for orders fulfilled on in progress) or contributing to staff wages, for example.
This latest news follows reports that EWM had received unsolicited offers for its heritage fashion brands which include Jaeger, Austin Reed and Jacques Vert. It is also undertaking a valuation process for the value fashion chain Peacocks, in a move which was said to be “exploratory”.