Coronavirus: Retailers demand 50% price cuts from factory workers

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Factory workers Bangladesh suppliers covid-19
H&M is the largest buyer of Bangladeshi apparel and said it was in talks to find a solution
// Bangladeshi manufacturers face pressure to cut prices by 50% as retailers are affected by the coronavirus pandemic
// Exports dropped by 84% in the first half of April
// £2.3bn worth of orders have been cancelled or suspended

Retailers are demanding 50 per cent price cuts from Bangladeshi manufacturers amid the coronavirus crisis.

The clothing sector has been heavily impacted by the pandemic, with exports dropping by 84 per cent in the first half of April as $3 billion (£2.3 billion) worth of orders were cancelled or suspended, according to factory owners.

Bangladesh relies on the garment industry for more than 80 per cent of its exports, with some 4000 factories employing about four million people.


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“We are still observing their departure from original contract terms, which includes renegotiating prices as low as 50 per cent of the original deal,” Bangladesh Garment Manufacturers and Exporters Association president Rubana Huq said.

“We are not aware of any other brand except one that has declared its plan in detail regarding delivery and payments centrally in black and white.

“The rest have all been conditional, mostly based on deferred payments, discounts and deferred deliveries.”

Meanwhile, Swedish retail giant H&M said it was working with other businesses to support garment workers in Bangladesh, where over two million have been affected by factory closures due to the coronavirus pandemic.

H&M is the largest buyer of Bangladeshi apparel and said it was in talks to find a solution.

The retailer said it was aware that suppliers and employees are “extremely vulnerable” in this situation.

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