As fresh restrictions kick in, local fashion businesses fear losses again

As the government has imposed a new set of restrictions in the face of rising Covid-19 cases, local fashion entrepreneurs are worried that they will incur losses.

Their concern comes at a time when they were expecting Eid and Pahela Baishakh sales bonanzas to help recoup last year's losses.

They say they will be unable to bounce back as fresh restrictions will limit the upcoming festivities and the pandemic has already reduced people's earnings.

The size of the local fashion market is over Tk30,000 crore, with Pahela Baishakh and Eid accounting for 75% of sales, according to clothes traders.

Bachchu Mia has been running Maria Boutique House for almost a decade in Banti village of Narayanganj's Araihazar. His Pahela Baishakh turnover reaches at least Tk10 lakh every year.

He suffered massive losses last year due to the pandemic despite investing around Tk6 lakh. He upscaled production this year to recuperate the losses, but the fresh restrictions have made him very worried.

"I borrowed Tk8 lakh to invest in my business this year. I had to increase investment to recover last year's losses. Now that fresh restrictions have been issued, I am concerned about how to handle bank loans, workers' wages, and factory rents ahead of the two big festivals," said Bachchu.

Like him, 8,000-10,000 boutique entrepreneurs are worried that they will face losses again this year.

The government on 29 March issued new restrictions amid the resurgence of the deadly virus. It said all kinds of public gatherings, including social, political, religious, and others, should be restricted.

The authorities also said public gatherings in social events, including weddings or birthdays, should be discouraged and public transports cannot carry passengers more than 50% of their seating capacity.

Businesses near the River Buriganga, including in Keraniganj, supply 70-80% of local garments sold across the country. Keraniganj is known as the hub of garments produced for low- and middle-income people.

Traders there say Eid sales help them stay afloat for the rest of the year. Due to the slowdown caused by Covid-19 last year, they struggled to pay factory and showroom rents as well as workers' salaries, to purchase machinery and raw materials, and to repay bank loans.

Muktar Dewan, owner of Golenur Garments, sells jeans wholesale at the Keraniganj district council market. His sales amounted to Tk2.5 crore during the 2019 Eid but plummeted to Tk25 lakh last year. His target is to sell Tk3 crore worth of garments during the upcoming Eid.

He told The Business Standard that he had used bank loans and a portion of his capital to pay workers and run his family as business was down last year.

"I am trying to turn around though I am facing great difficulties paying factory and showroom rents. If the coronavirus situation goes out of control again, there will be no way to survive," he said.

There are about 10,000 traders and over 5,000 factory owners in Keraniganj who are facing similar slowdowns in business. But despite their worries, they do not want to lose hope yet as Eid is still more than a month away.

Hazi Muslim Dhali, owner of Muslim Collection, a large local garment manufacturer, and president of Keraniganj traders' association, said entrepreneurs had ramped up preparations this year to repay bank loans and recover last year's losses.

He said workers are working day and night in all Keraniganj apparel factories.

Big brands' preparations

Like apparel traders, big fashion brands, including Deshi Dosh, Yellow, and Gentle Park, also see a boom in sales during Pahela Baishakh and Eid. Almost all of them are making bigger preparations this year. 

Kay Kraft is a leading brand of Deshi Dosh. Its 25 showrooms across the country are now featuring Pahela Baishakh clothes.

Shahjahan Firoz, Bashundhara branch manager of Kay Kraft, told The Business Standard that they are offering more varieties this year.

He said sales are a bit down and there is increased concern over the fresh restrictions.

Hadi Chowdhury, head of retail operations at Yellow, said he is expecting better sales this year as people did not spend much on clothes in the last one year due to Covid-19.

"Preventing Covid-19 infections is not in our hands, but the new restrictions will certainly have an impact on sales," he said.

Monirul Haque Parvez, head of the Elephant Road branch of Rang Bangladesh, said they are offering the highest varieties ahead of this year's Pahela Baishakh compared to any other year.

Shahin Ahmed, president of the Bangladesh Fashion Designers' Association and owner of Anjans, thinks fashion brands will incur losses of Tk6,000-7,000 crore if Pahela Baishakh and Eid-ul-Fitr are held in a muted manner like last year.

He said the association members' Pahela Baishakh sales target is Tk3,000 crore this year.

"But if we allow 50% of workers to make clothes complying with new restrictions, we will not be able to reach our sales target," he said.

"Big brands are preparing for the upcoming festivals. There is concern over the rising cases of Covid-19, but I hope the situation will not go out of control like before."

An official of Aarong told TBS that over 10% of their annual turnover of around Tk1,000 crore comes during Pahela Baishakh.

He said Aarong is fully prepared for the festival this year.

"Eid-ul-Fitr is the largest festival that accounts for around 30% of Aarong's annual turnover. Sales are low so far this year," he added.

Pahela Baishakh fairs still uncertain

Bangladesh Small and Cottage Industries Corporation officials said a 10-day fair is arranged at the Bangla Academy for Pahela Baishakh every year and over 150 entrepreneurs from different parts of the country open stalls there.

An entrepreneur makes a profit of up to Tk10 lakh in those 10 days. But if the fair is cancelled this time like last year, several lakh small entrepreneurs selling Jamdani saree, furniture, shoes, and other local fashion items will incur heavy losses.

SME Foundation Chairperson Dr Masudur Rahman said at least 25 lakh people in the country earn their livelihoods from small and cottage industries and they make big preparations for Pahela Baishakh and Eid.

"Fairs are organised all over the country every year. But the government's ban on organising fairs due to the pandemic has not been lifted yet. We are trying to organise fairs."