Pohela Boishakh (Bengali New Year) and Eid-ul-Fitr are two occasions when fashion retailers, brands and boutique houses do a roaring business in Bangladesh. Naturally so, all were anticipating to do some good business this year too. Alas, it was not to be! Pohela Boishakh is already gone and Eid is just round the corner, but owing to the global COVID-19 pandemic, looks like it wouldn’t be a good one for businesses.
Customers start thronging stores from early April to buy their favourite outfits to welcome Pohela Boishakh, a big occasion for Bengalis the world over, in all its pomp and gaiety. As a matter of fact, many brands/fashion houses also launch their Boishakh collections in the first week of March itself. But it has been a different story this year.
“Preparations for Pohela Boishakh had been on in full swing like any other year,” informs Shaheen Ahmad, President of Fashion Entrepreneurs Association of Bangladesh (FEAB) and top executive of fashion house Anjan’s, further adding, “In fact, there had been a bit of extra effort this year, as Eid follows close on the heels of Pohela Boishakh.” FEAB is a platform of 250 domestic fashion entrepreneurs.
Sales had already picked up from February itself on the occasion of Language Day (in February) and Independence Day (in March), with anticipation of Pohela Boishakh and Eid being the icing on the cake. But as the days went by and it was almost the middle of March, sales started to take a nosedive, and from 21 March, stores and shopping malls had to close down owing to the rapid spread of coronavirus.
As per FEAB, around 5,000 domestic fashion houses across the country, which targeted to sell products worth more than Taka 2,000 crore this Boishakh, had to suffer losses to the tune of around Taka 1.25 billion in March itself.
As per Mohammad Ashraful Alam, Chief Operating Officer of Aarong – the biggest lifestyle brand of Bangladesh as per some account (an enterprise of Bangladesh Rural Advancement Committee (BRAC), the largest NGO in the world), sales during Pohela Boishakh and Eid-ul-Fitr contributed to around 40 per cent of their annual turnover, which they missed and by quite some distance this time around.
Tanvir Hossain, Head of Marketing, Aarong, shares, “Last year, our turnover was around Taka 10 billion, and 10 per cent of the revenue comes from Boishakh sales while another 30 to 35 per from Eid.”
Now with the much-awaited Eid-ul-Fitr expected to be celebrated in late May, fashion retailers are left with not many hopes. “During Eid-ul-Fitr, the domestic fashion houses usually sell products worth Taka 4,000-5,000 crore, but the sales have also been suspended now,” Shaheen rues.
Former FEAB President Azharul Hoque Azad underlines that due to the existing situation, 25 lakh people including five lakh who are directly involved with the trade are facing severe financial hardships.
The anxiousness amongst the fashion entrepreneurs is rather palpable and understandably so, as they have invested their savings, taken bank loans and arranged funds from other sources to prepare for the upcoming occasions. But all that is stuck now even as the expenses keep piling up. There’s rent to be paid, utility bills, instalments on loans taken, workers’ salaries and Eid bonuses… the list just goes on and on.
What’s more, this not only affects brands and retailers, but the domino effect also continues down the supply chain, as the Bangladesh fashion industry involves a long line of other industries and crafts. Directly involved are all the traditional weaving industries of Tangail, Sirajganj and Pabna. There are the hand-woven crafts of Jamdani and Benarasi of the indigenous Manipuris. Other essentials of the industry are embroidery as well as natural and chemical dyes. The leather, metal industries, jewellery, jute and so many other traditional sectors are also part and parcel of the fashion industry.
In these trying times, some banks have, however, come to their rescue. Recently, Standard Chartered Bank announced an assistance scheme for its clients. City Bank, reportedly, also has a long-standing relationship with many of the top fashion houses of the country. As per the bank’s Managing Director and CEO Mashrur Arefin, his organisation would stand by these entrepreneurs in this difficult phase. Mashrur also claimed that they are in discussion with the Bangladesh Bank, the country’s central bank, about ways to provide the clients with payment holidays. Besides, City Bank is also mulling providing running capital and other forms of support once the situation is back to normal.
Meanwhile, the Secretary of the Bangladesh Handloom Board, Md Ahsan Habib, says that they had taken up special assistance initiatives for the marginal handloom weavers and the Board’s liaison officers have been asked to make a list of the marginal weavers and immediately hand these over to the district administration.
However, at the time of writing this report, there were no signs of the dreaded contagion being brought under any control whatsoever in Bangladesh. Rather, the graph has been going up with 2,144 confirmed cases of coronavirus and 84 deaths reported in the country. And many fear the existing condition is very much akin to that in the West where brands and retailers have had to shut shop with uncertainty looming large. Scores of retailers including Macy’s, Nordstrom and Nike that sell non-essential merchandise across USA in thousands of outlets had to shut down from mid-March in response to the pandemic. And with Spring merchandise piled up, brands like Gap and Ralph Lauren have already stopped ordering for the Fall season with no clear view of when stores will reopen.
As far as Bangladesh is considered, experts are of the opinion that if the existing situation is brought under control soon, it will take up at least till December for things to be back to normal. Even then, it will be essential commodities like food and medicines, and not apparel items, which will be people’s top priority.
But as stocks keep piling up, fashion retailers, boutiques and fashion houses would need cash to survive, sustain and tide over the hard times. People in the know of things believe that surviving this crisis would be extremely difficult without any Government support.
The Government has already announced a coronavirus bailout package of Taka 50 billion for the export-oriented sector (which includes readymade garments, leather and leather products, ceramics, pharmaceuticals, and the like) to pay workers’ wages. But there’s nothing significant happening as far as helping the fashion retailers and fashion houses is concerned. Industry insiders are for long-term and low-interest loans now.
They also feel that such an initiative drawn up by the Government would not only provide the much-needed help at this critical juncture, but also help the country’s fashion industry earn official recognition. However, FEAB needs to push really hard for that to happen.
Experts are also of the opinion that the FEAB and other associated bodies need to lobby hard with SME Foundation and other Government bodies and private organisations, to highlight the fashion industry with emphasis, so as to make things happen. Increasing taxes on imported fashion products or at least halting their imports for a couple of years could further provide the much-needed support that the Bangladesh fashion industry now needs to get back to its feet.
But till something concrete takes shape, it’s all uncertainty and hopelessness for the country’s fashion retailers and fashion houses.