Polish fashion retail giant LPP SA, famous for brands like Reserved, Cropp, and Sinsay, has suspended its apparel sourcing from Bangladesh following mounting payment disputes totaling around $40 million with local garment manufacturers.
Industry insiders and leaders from the Bangladesh Garment Manufacturers and Exporters Association (BGMEA) confirmed that the Polish buyer halted fresh orders after local suppliers repeatedly raised allegations of delayed payments, discounts demanded after shipment, and non-settlement of outstanding dues.
According to sources, dozens of Bangladeshi apparel exporters have been suffering from financial strain as LPP SA withheld payments worth approximately $40 million for goods already manufactured or shipped. While some suppliers claim the buyer sought ungrounded price cuts and delayed payments beyond agreed terms, representatives from the buyer side reportedly cited quality discrepancies, delayed deliveries, and global retail headwinds as reasons for the payment delays.
The dispute escalated to a point where the BGMEA intervened to mediate between the affected factory owners and the Polish buyer to resolve the outstanding financial liabilities amicably. However, as talks stalled and tensions grew over unresolved claims, LPP SA decided to temporarily halt its sourcing activities from the Bangladeshi market.
The suspension comes as a significant blow to Bangladesh's ready-made garment (RMG) sector, as LPP SA has been one of the prominent European buyers expanding its footprint rapidly in Central and Eastern Europe and sourcing millions of pieces of apparel from Bangladesh annually.
BGMEA president Mahmud Hasan Khan has expressed concern over the situation, noting that such large-scale payment disputes create operational distress for local factories, affecting cash flow, raw material payments, and worker wage disbursements.
The apex trade body is actively working with trade officials, legal advisors, and the buyer’s representatives to recover the unpaid dues and restore commercial ties, he said.
The Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA) has also taken a firm stance regarding the matter. BKMEA President Mohammad Hatem confirmed receiving the suspension letter from the Polish brand.
"Whether they continue sourcing from Bangladesh is their business," Hatem said. "But if they fail to take steps to settle the outstanding payments owed to Bangladeshi exporters, we will move to have them blacklisted in Bangladesh."
He added that the association would also raise the issue of LPP's alleged non-compliance with the European Union, buyers' forums, and other relevant stakeholders.