Major Garment Buyer LPP Suspends Orders, Putting $700 Million Exports At Risk
LPP S.A., a major Polish fashion retailer, has stopped placing new orders from Bangladesh. This decision makes about $700 million in annual garment exports uncertain. The company said its Dhaka office officials faced police harassment and lawsuits. Many Bangladeshi garment factories now fear potential closure.
Bangladeshi exporters claim LPP has a moral duty. They say LPP gave assurances for payments from a Russian buyer, FES Retail. FES Retail owes nearly $40 million to these exporters. But LPP states it is not responsible for these payments.
Last month, two buying houses filed lawsuits in the High Court. They named LPP Dhaka officials. These cases aimed to recover unpaid money from FES Retail. After the lawsuits, police raided the homes of several LPP officials at night. This led to LPP’s decision.
On July 21, LPP wrote to local garment associations. It told them about payment disputes and harassment. The company then decided to reduce its orders from Bangladesh. LPP has 3,700 stores in 46 countries. It buys from around 250 factories in Bangladesh.
Ensa Clothing is one affected supplier. It exported trousers worth $52,000 for FES Retail. The payment never came. Enamul Kabir, Ensa Clothing’s Managing Director, said LPP paid for earlier orders. He believes LPP must take responsibility. Other suppliers fear their factories will close without these payments.
Mahmud Hasan Khan, president of BGMEA, said LPP has no legal fault. He hopes for a quick solution. He also asked police to stop harassing LPP officials. Mohammad Fazlul Haque of FBCCI mentioned LPP’s moral duty. He stressed the need to protect exporters and keep LPP sourcing from Bangladesh.
LPP sold its Russian business in 2022. It later introduced FES Retail to Bangladeshi suppliers with payment promises. But payments became irregular. Industry leaders say a high-level agreement is needed. This will protect Bangladesh’s image and vital garment exports.
