The Bangladesh Garment Manufacturers and Exporters Association (BGMEA) has backed LPP SA’s position in a dispute over unpaid invoices linked to its former Russian business, saying claims should be pursued against the parties legally responsible for the liabilities.
In a joint statement, BGMEA and the Polish fashion retailer said LPP is neither a debtor nor legally obliged to settle the disputed claims.
LPP said it continues to settle its obligations to direct suppliers and business partners in Bangladesh in line with applicable contracts.
The dispute involves nearly $40 million in claims by Bangladeshi garment manufacturers and buying houses over apparel supplied for Russia-based FES Retail. The exporters say payments for the shipments remain outstanding.
LPP has rejected liability, saying it is not the debtor for those claims. The company has maintained that its own contractual obligations to direct suppliers in Bangladesh are being honoured.
The dispute intensified in late July when LPP suspended new orders and product development from Bangladesh while reviewing its sourcing strategy.
The move raised concern in Bangladesh’s apparel industry, where LPP is a significant international buyer. Industry sources have said the retailer previously sourced more than $700 million worth of garments from Bangladesh annually.
The latest statement seeks to separate the payment dispute from LPP’s broader sourcing relationship with Bangladesh.
LPP said its review of some sourcing activities was intended to protect its local employees and provide legal certainty and a stable, predictable and fair environment for its operations.
The review was not directed against manufacturers and did not change LPP’s commitment to its direct contractual obligations in Bangladesh, the company said.
BGMEA and LPP acknowledged that factories affected by the dispute are facing difficult commercial conditions.
But they said any negotiations over the disputed liabilities should take place with the parties legally responsible for them. LPP said it would assist in constructive dialogue where necessary while preserving its legal position.
The dispute matters beyond the companies directly involved. More than 350 manufacturers in Bangladesh currently have business relationships with LPP, according to the joint statement.
BGMEA and LPP said a dispute involving a limited number of third parties should not damage other manufacturers, workers or LPP’s long-standing business relationship with Bangladesh.
They urged stakeholders to avoid broad or misleading publicity that could unintentionally affect companies and workers not involved in the dispute.
BGMEA will engage with relevant ministries, government authorities and industry stakeholders to support an orderly process.
It will also seek protection for LPP officials and employees from inappropriate harassment, pressure or unfounded legal complications.
The joint statement does not prevent any party from pursuing legitimate claims against entities that are legally liable.
BGMEA and LPP said they would work towards a transparent and mutually acceptable resolution while maintaining safe, stable and uninterrupted business operations in Bangladesh.
