// Edinburgh Woollen Mill Group considers filing legal action against a trade organisation representing Bangladeshi garment workers
// The Bangladesh Garment Manufacturers and Exporters Association accused the group of owing manufacturers £27m in unpaid bills
Edinburgh Woollen Mill Group is considering filing a lawsuit against the trade organisation representing Bangladeshi garment workers after it was accused of owing manufacturers £27 million in unpaid bills.
The retail group, which is owned by billionaire businessman Philip Day, has informed the Bangladesh Garment Manufacturers and Exporters Association (BGMEA) that these “old figures are completely baseless and without any merit”.
In a letter sent to the BGMEA chair Rubana Huq, EWM Group chairman John Herring said the allegations are now jeopardising the company and its 24,000 employees and that recent accusations made in the media of any remaining outstanding debt to suppliers in Bangladesh is “categorically false”.
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“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,” EWM said.
Herring has called for urgent clarification from the organisation, but has not yet received a response.
A source close to EWM called the BGMEA’s claims “completely reckless”.
Retail Gazette also understands that the EWM Board is due to meet tomorrow to discuss the issue and decide whether to launch legal action.
Since the letter, a number of suppliers that are members of the BGMEA have written to EWM Group, saying that “any damage done to EWM Group would be catastrophic both for us and the Bangladesh RMG industry as a whole”.
In its communications with the BGMEA, the EWM Group suggested that these false statements “risked pouring hot water over its important relationships with credit insurers”.
In May, EWM Group, which owns brands such as Peacocks and Jaeger, hit back at the BGMEA after the company was told not to ask for discounts from garment-makers, calling the organisation’s approach “unproductive and uncollaborative”.
The news comes after Day was said to have appointed FRP to sound out potential buyers for Peacocks.
The adviser is to provide market intelligence on the business value of the Peacocks store chain, which means it is an exploratory process.
A source close to the process told Retail Gazette last month that this is a valuation process for Peacocks, and not a sales process.