Bangladesh Garments and Manufacturing Association has sent a letter to billionaire Philip Day demanding the settlement of £27 million in unpaid bills.
About 30 suppliers have threatened to halt production unless Day’s Edinburgh Woollen Mill (EWM) group pays up. The letter accuses EWM and its agents of taking “undue advantage of the Covid-19 situation”.
The group has more than 1,000 outlets including Peacocks, Austin Reed and Jaeger.
The letter demands payment for goods already handed over to shipping agents by 29 May and payment by 5 June for orders that are already in production. It says any discount requested by the retailer “beyond permissible limits” could lead to legal action.
“The demand for the discounts will not only be financially catastrophic, but will also expose our members to various claims and liabilities from regulations, banks and other third parties, which will eventually legally implicate the buyers themselves,” the letter said.
“We will have no option but take the decision to place an embargo and blacklist the buyers and their agents who do not comply with our instructions, which will prevent them from conducting business with our members in the future either directly or indirectly.”
“We have engaged with all our individual suppliers with openness, honesty, and the best of intentions, even when the circumstances are difficult,” a spokesman for EWM group said.
“Our discussions with the vast majority of suppliers have been positive, and they have understood that we are trying to find a balanced way forward that matches the immediate, urgent challenges faced by high street stores nationally and those of suppliers.”
Bangladesh is the second largest garments manufacturer in the world after China.