Web Exclusive | February 2017
Brexit fires salvo at Bangladesh
As major British apparel retailer Next Plc slashed its work order volume, Bangladesh has already started feeling the pinch of Brexit, claims a senior official of a sourcing company. The UK is the third largest garment export destination for Bangladesh after the US and Germany.
Next, is the largest clothing retailer in the UK. It had planned to buy about $260 million worth apparels from Bangladesh in 2016. But in the end, the clothing, footwear and home products retailer sourced about $180 million of garment items, it is understood. Next usually purchases $10-$20 million more than its annual target. Last year was an exception. Next sources clothing worth more than $500 million from Bangladesh in two ways: either directly from garment factories or indirectly through sourcing companies. The purchase volume of Next through third party vendor agencies might have also shrunk last year.
Meanwhile, Brexit is going to have an adverse impact on Cambodia’s garment export sector, the International Labor Organization (ILO) has warned. Though new duty-free access to the US will ease pressure on exporters for some time, Cambodia’s recent rise to lower-middle income status could also add to its challenges in a few years. International Labor Organization wage specialist Malte Luebker said, “Exports continued their strong growth over the first half of last year, up 10.8 per cent year-over-year to $3.5 billion.”