Debenhams accused of 'stealing' as retailer demands 90% discount from suppliers already at UK ports
ITV News has seen correspondence from Debenhams’ administrator to Bangladeshi suppliers demanding a 90% discount on garments orders already at UK ports.
“The Administrators are looking to agree full and final settlement with you at 10c in the $,” reads an email sent from FRP Advisory (the administrator for Debenhams) to a clothing supplier.
The correspondence goes on to say: “If an offer for these goods is not agreed, as the Administrators are not in a position to settle the amounts due, the goods will be rejected and returned to you at your cost.”
Debenhams formally went into administration last month and the consequences of which, are being felt not just at home, but also on the other side of the world.
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Debenhams has cancelled and is withholding around £53 million worth of payment on orders from Bangladeshi suppliers according to The Bangladesh Garments Manufacturers and Exporters Association (BGMEA), impacting 34 factories and almost 160,000 workers in Bangladesh.
Of the £53 million worth of orders from Debenhams, around £21 million of this has already been shipped from Bangladesh and has either already docked at or is en route UK ports.
One company executive from a factory in Bangladesh began our conversation with the desperate plea “Please help our country!”
Lantabur Apparels employs 7000 workers and stands to lose £4.3million from Debenhams’ cancelled orders.
Their Chief Operating Officer said some of the company’s workers could end up homeless if the organisation does not receive its payment.
“Thousands are at risk from this cancellation alone. If we are not paid, we would be forced to shut down parts of the business, this would leave many workers jobless and will put some on the streets," Mohammed Nasir Uddin warned.
“These workers have sweated long and hard for these companies. Now the companies must pay, or there will be huge financial and social consequences."
Mohammed Nasir Uddin, COO Lantabur Apparels, pleaded "please help the country, help the people."
Another factory owner told ITV News that some of his goods are already being sold on Debenhams’ online retail outlet but he is still yet to be paid.
In an angered response to Debenhams’ offer for a 90% discount for his goods, Shafiq Hassan from Echo Sourcing accused the retailer of theft: "How can you not pay us in full when you are selling our product online? This is stealing from the poor and vulnerable people in Bangladesh, who have helped build empires around the globe.”
“It is time for you to think about justice, fairness, plus two other words ethical and sustainable as a start. Abdicating your basic responsibility in reneging your contract is unacceptable that leads to abandoning the most vulnerable,” he adds.
Speaking to ITV News, Shafiq said, “seeing my goods on Debenhams’ website made me realise this system is so unjust, people can actually get away with murder. How is a country which is based on freedom and democracy allowing its companies to murder the Bangladeshi garments industry?”
Shafiq has demanded Debenhams return his goods to him should they be unable to pay. He says he would much rather donate all his clothes to NHS staff than accept Debenhams’ offer.
The safety net provided by the state in Bangladesh is frail and unemployment benefit doesn’t exist.
Bangladeshi garments workers earn on average just £88 a month according to the BGMEA, meaning they are at risk of destitution should they be put out of work.
The large scale cancellations could be enough to decimate the garments industry in Bangladesh which makes up 84% of the country’s total exports.
Whilst companies like Inditex and Primark have since said they will reinstate orders, Debenhams says it has had to make some "tough decisions".
A Debenhams spokesperson said: "Like all fashion retailers, we have had to make some very tough decisions in relation to our supply chain. We are trying to deal with all those affected as fairly and openly as possible.
"As we have said, suppliers who continue to work with us during our administration period will be paid to terms."