Edinburgh Woollen Mill hits back at claims of unpaid manufacturing bills

By

Sandra Halliday

Published
May 26, 2020

The trade body representing garment manufacturers in Bangladesh is threatening to stop production and deliveries to Edinburgh woollen Mill over claims that millions of pounds are owed to factories by the company.

But the company has hit back and said the Bangladesh Garment Manufacturers and Exporters Association (BGMEA) is “putting media noise and tactics above engagement, discussion and solutions”.

The BGMEA has circulated a letter saying EWM could be blocked from placing future orders with its members.

The business, which  owns chains including Jaeger, Peacocks and Austin Reed and is which is controlled by billionaire Philip Day, has been accused of cancelling orders, demanding large discounts and withholding payments for goods already shipped or made.

But EWM said that BGMEA hadn’t contacted it prior to the letter being made public and that the company has “been actively working on” agreeing deals about outstanding stock over the last three months”.

It also said it has heard from other members of BGMEA who disagree with the trade body’s approach.

The company said it had already paid for the majority of future stock when the crisis hit originally, “which seems to have been ignored in all of the commentary so far”. And it added that in recent months, it has reached deals “with the very vast majority of suppliers on all outstanding stock. We have discussions with a handful left, but the BGMEA never even confirmed with us the progress that we have been making”.

A spokesperson for EWM Group said: "We only received the letter from the BGMEA today, and we are disappointed it has been shared more widely before we have had the chance to respond, consider the proposals, and work together to find a solution.

“We have looked at literally every option on the table and worked hand-in-hand with all our suppliers to find solutions, but we also need to recognise that these are difficult and complicated issues. There are not simple problems, and every potential quick solution has long-term implications. If we took delivery of remaining unmade stock for the Spring season with all our stores closed, this stock would only be stored for next year and depress 2021 orders.

“We also question why this letter was sent just before the holiday season of Eid, when much of Bangladesh is closed, which will make it very difficult, if not impossible, to have productive discussions.”

The spat comes as a number of UK companies have faced accusations of arbitrarily cancelled orders that have led to major problems for Bangladeshi manufacturers.

And many high-profile businesses have been at pains to point out that they’ve treated their suppliers sensitively during the crisis.