Debts and losses are piling up – forcing production units to shut down while businesses are struggling to obtain the government’s stimulus funds
The country's clothing market has shrunk in the wake of dwindling demand. While manufacturers have slowed down or stopped production to avoid irrecoverable losses, artisans and weavers have been forced to change professions to survive the Covid-19 pandemic.
The predicament is apparent everywhere – be it the capital's Islampur – the biggest wholesale market for clothes, the commercial retail hub of New Market or popular local brands of ethnic wear such as Kay Kraft and Aarong.
They all have the same story to tell. They had stocked clothing items for Pahela Baishakh – the first day of the Bangla calendar – and Eid-ul-Fitr; but most of the items remained unsold as shops had to bring down their shutters and customers locked themselves in their homes in the two-month-long shutdown due to the Covid-19 pandemic – from March through May.
Then came the economic shock with income and job losses.
Even though there are no restrictions on movement anymore, customer turnout at retail stores has been thin, which in turn has impacted the businesses of wholesalers.
Though the data is scanty to shed light on the extent of the damage, The Business Standard has learnt that the sales dropped by as much as 90% in some cases.
Some businessmen were overwhelmed with debts and are now unable to roll out new products to pick up sales in winter and the next season.
Ali Zafar, owner of a shop called Baran at the Aziz Co-operative Super Market in Shahbagh, is one of them – bearing a cumulative loss of Tk30 lakh since March due to the pandemic.
He has suffered a series of events striking him down every time he tried to rise.
First, the prospects of a return from investment Ali had made before the shutdown turned bleak. At the time, his factory was in the middle of a production cycle to bring out new collections.
Then he geared up for a good sale ahead of Eid-ul-Azha on 1 August. To his dismay, the revenue was down to one-tenth of what it had been last year.
"I had nothing left for myself after paying off the salaries and interest on my credit," said Ali Zafar.
Baran, which sells men's garments, does not have any salesmen now. Seated at the counter of his shop, Ali said he had to furlough four workers of his factory in August and stopped its operation altogether.
Before the wave of Covid-19, his average sales was Tk10,000 a day and now he cannot match that figure even in a week.
Facing a shortage of capital to inject into his business, Ali applied for loans from a government bank under the stimulus package allocated to help small and medium enterprises rebound.
"But, only Tk3 lakh was granted, which is too little compared to what I need to turn my business round. I need at least Tk10 lakh to get new stocks for this season and the next," Ali said.
At a jamdani house in New Market, salesman Murad Khan said the shop owner fired seven staff members and stopped buying new items from weavers. "Teachers and students of colleges and universities were our regular buyers. Our sales dried up as they retreated into their homes."
The enduring effect of the pandemic is also visible at the Islampur clothing market which mostly caters to the lower segment of the population.
During a recent visit, Waliullah, a salesman of locally-made sarees at a shop by the road, was seen standing and chatting without a single customer stepping inside to look through his shelves – let alone buy a saree.
Over the last couple of months, many days went by without selling anything. "If you ask how bad the business is now compared to the pre-corona period, I would say weekly sales have dropped below 20%," Waliullah said.
Shamsul Alam Sabjal, president of Islampur Cloth Merchant Association, estimated that 5% of around 10,000 shop owners in Islampur suspended their production units on the outskirts of Dhaka, in Munshiganj, Narsingdi and Narayanganj.
"The figure will go up to 50% if businesses fail to revive in one or two more months," he said.
This picture of the wholesale market reflects the demand for clothes across Bangladesh since 95% of its products go to adorn stores outside Dhaka.
Sabjal said his five showrooms in Islampur hardly had sales worth Tk2 lakh a week whereas it was at least Tk25 lakh before the pandemic.
After the shutdown, businesses were expected to get back on track for recovery. Instead, he said, things got worse.
Local popular brands like Aarong and Kay Kraft also suffered a dent – 40% to 60% in the sales of different outlets.
At the Moghbazar outlet of Aarong on Tuesday evening, customers were allowed in without online registration. A sales associate said the requirement for online registration for getting into Aarong was stalled a while ago. Still, customer presence was low.
Aarong and Kay Kraft offered month-long special discounts in August and September, for the first time this year, in an attempt to support their artisans, according to staff of the outlets.
While revenue of brick-and-mortar shops plummeted, they said online sales rose quite unexpectedly.
Still, new investment is crucial to sustain the business, as suggested by Khalid Mahmood Khan, one of the partners of Kay Kraft.
Kay Kraft is innovating ways to bring new dimensions to its relationship with customers, promising more varieties of products and a better shopping experience at its outlets, he added.
It is working on plans to collaborate with small and medium entrepreneurs to include new products such as books and leather goods at its stores and is looking to expand outside Dhaka.
Kay Kraft is also focusing on redesigning its website because, Khalid said, the brand could still be with its partners for online sales.
He fears that without the government's well-thought-out support, many local clothing businesses will perish; further, artisans and weavers will have to leave their profession for good.
"We take great pride in our traditional fabrics – such as jamdani – and designs. They are part of our heritage. We should protect them," said Khalid.