Amid the COVID-19 pandemic a Bangladeshi readymade garment (RMG) manufacturers — battered by the pandemic and the unethical business practices of Western clothing giants have safeguarded an exceptional victory against Sears.
According to attorney Joseph E. Sarachek, whose firm represented the 21 Bangladeshi factories in a $40 million lawsuit filed against Sears last June, his clients have gotten ‘the bulk’ of their money back in a defrayal with Transformco, the privately-held company set up by American billionaire Edward Lampert’s ESL Investments hedge fund to acquire Sears and Kmart out of bankruptcy last year.
Sears is far from alone in shortchanging RMG suppliers during the COVID-19 pandemic. Last spring, when the COVID-19 struck, scores of key brands and retailers, including Forever 21, Ross Dress for Less.
The Children’s Place, Kohl’s KSS -3.6%, Global Brands Group and Arcadia (owners of Topshop), declined payment to RMG factories on US$40 billion worth of completed goods, leaving factories facing down bankruptcy and pushing RMG workers out onto the street without pay in some cases.
Sears pushed apparel suppliers to a breaking point after the brand went through bankruptcy and factories were left without payment on completed inventory multiple times.
The Bangladeshi apparel suppliers who filed suit over the void orders, some owed as much as $6 million each for garments they’d already made and shipped for Sears last spring.
Sears owes 19 Bangladeshi suppliers about $50 million in arrears, Rakibul also added.
Sears will pay the rest of the amount by selling apparel goods, while advance payment will be adjusted from the first lot sales. Then the rest of the sales sum will be divided equally to brand and suppliers, explained Rakibul.
