Dropping sales in the West, along with growing prices caused by the Russia-Ukraine conflict, is the dark cloud on the horizon for Bangladesh’s already struggling apparel industry. According to exporters, overseas buyers are cancelling new contracts and deferring old ones, causing the industry’s earnings to plummet in the coming months. Shahidullah Azim, vice-president of the Bangladesh Garment Manufacturers and Exporters Association, anticipates a $500 million drop in August shipments from $2.88 billion in July. According to him, export orders fell in August and the repercussions will be felt in September and October. “Many buyers are delaying orders.” Walmart has reduced orders by 30%.”
Khan MonirulAlam, managing director of exporter Fashion.com Limited, said a buyer placed an order of 20,000 pieces of eight to nine items. “It was supposed to be an order of 70,000 to 80,000 pieces of two to three items.” The industry’s condition bore a brighter outlook months ago. After it earned $42.2 billion in 2021-22, the government targeted $46 billion worth of exports from the apparel sector for the current fiscal year, although fears of a fallout from the war raging in Europe grew after Russia launched its invasion of Ukraine in February.
According to Reuters, inflation-weary buyers in the United States have been skimping on apparel purchases, leading merchants to lower prices to get inventory off the racks. Gap was the latest retailer to report a drop in apparel sales for the second quarter, reporting that net sales fell 8% year on year to $3.86 billion. Earlier this month, officials at Walmart and Target in the United States provided steep discounts and rollbacks on clothing.In conference calls with analysts, Victoria’s Secret, Urban Outfitters, and Kohl’s all stated that shoppers are only purchasing particular styles of clothing. Customers are eager to open their wallets for a two-for-$52 offer on bras at Victoria’s Secret, but a $52.95 pair of joggers at PINK may be too much for them.
Monirul predicted that August exports would be relatively flat because orders were placed in April or May. Some orders had been postponed at the time, but the aggregate data would be reflected presently. According to FazleeShamim Ehsan, vice president of Bangladesh Knitwear Manufacturers and Exporters Association, August’s year-on-year growth may increase because exports declined last year due to the coronavirus outbreak, but earnings in August increased.