In a bustling industrial district on Dhaka’s outskirts, the Padma Satel Arab Fashions factory stands as a testament to the region’s vibrant garment industry. Seven storeys high, the building is crammed with cartons bearing the names of Australian fast fashion brands like Millers, Rivers, and Rockmans. Inside, rows of workers—primarily women—are diligently cutting denim and assembling jeans. However, the future of this factory is now clouded with uncertainty.
Mosaic Brands, the parent company behind these labels, recently entered voluntary administration after failing to make a $2.5 million payment to Padma Satel Arab Fashions. This move has set off a chain reaction, impacting 23 factories across Bangladesh, India, and China, which are collectively owed over $30 million. The consequences are dire for the workers who rely on these jobs for their livelihoods.
“Since June, we have been continuously requesting them to pay our overdue payment, but they told us their sales were down and encouraged us to continue our shipments and they would pay soon,” said Jabed Ahmed, director of Padma Satel Arab Fashions. “If I don’t get the money from Mosaic, I don’t think we can survive.”
Lives Hanging in the Balance
For the 3,000 employees at Padma Satel Arab Fashions, Mosaic’s financial troubles mean more than just unpaid bills. Yasmin Laboni, a 26-year-old garment worker, fears for her family’s well-being. “Our owner can’t pay us from his pocket, at best he can maintain some of the workers,” she explained. “Everyone will be affected by this non-payment. It will be difficult to pay for medical expenses and to buy clothing for ourselves.”
The uncertainty extends beyond wages. Mohammad Alam Mia, a factory manager earning $450 monthly, voiced his concerns about potential mass layoffs. “All we ask is that foreigners pay on time,” he said, highlighting the dependency on timely payments from international partners.
The Human Cost
- Approximately 80% of the 4.4 million people employed in Bangladesh’s garment sector are women.
- The sector contributes $34 billion annually, making up 85% of the country’s export revenue.
These statistics underscore the immense impact Mosaic’s default could have. The factory workers, many of whom earn around $6 a day, are already struggling with low wages. Now, with payments stalled, their financial stability is at further risk.
Mosaic’s Strategic Missteps
Back in September, Mosaic Brands announced the closure of five of its brands—Rockmans, Autograph, Crossroads, W.Lane, and BeMe—as part of a restructuring effort. The company aimed to focus on core brands like Millers, Noni B, Rivers, and Katies to better serve both metropolitan and regional Australian markets.
“Our priority is to accelerate the rationalisation plans we have in place to focus on the core brands to service current and attract new customers across metropolitan and importantly regional Australia,” said CEO Erica Berchtold.
However, just a month later, Mosaic filed for administration, citing the need to reset the business and secure its future. The administrators, FTI Consulting, are currently evaluating the company’s viability, with plans that may include asset sales, restructuring, or even liquidation.
Financial Turmoil
| Brand | Status |
|---|---|
| Rockmans | Shuttered |
| Autograph | Shuttered |
| Crossroads | Shuttered |
| W.Lane | Shuttered |
| BeMe | Shuttered |
| Millers | Continued |
| Noni B | Continued |
| Rivers | Continued |
| Katies | Continued |
Mosaic’s aggressive business strategies have been criticized for exacerbating existing problems within the garment sector. Suppliers like Hydroxide Knitwear have reported unsustainable payment terms and pressure to accept significant discounts, leading to financial strain.
“This is like criminal fraud,” claimed Ohmar Chowdhury, owner of Hydroxide Knitwear. “They pressured us to accept huge discounts, but we can’t sustain that.”
Calls for Accountability
The fallout from Mosaic’s actions has prompted calls for a thorough audit to understand the full extent of the defaults affecting suppliers across several countries. The Bangladesh Garment Manufacturers and Exporters Association has expressed deep concerns, emphasizing that Mosaic’s behavior sets a troubling precedent for the industry.
“We thought if Mosaic is still placing orders then we have to keep the relationship alive,” said Sarwar Hossain, manager of Sultana Sweaters. “Because we were one of the largest manufacturers, we could not entertain unethical practices and had to protect our reputation.”
Mohiuddin Rubel, a former director of the association, criticized Australia’s stance on the matter. “If one Australian brand doesn’t pay, despite raising this to the Australian High Commission several times, what does it say about Australian standards and not wanting to take responsibility?”
Industry-Wide Implications
The garment sector in Bangladesh, the world’s second-largest exporter after China, employs 4 million people. The recent turmoil threatens not only individual livelihoods but also the broader economic stability of the region.
Voices of Despair
The human stories emerging from this crisis are heart-wrenching. Sarwar Hossain shared his personal struggles, revealing the emotional toll of the financial instability. “I’ve thought about taking my life; this situation is unbearable,” he confessed. “We in Bangladesh can’t do anything. They demand transparency from us, but they evade accountability.”
Oxfam Australia, which provides development assistance in Bangladesh, highlighted the entrenched exploitation within the garment industry. “These workers are already paid poverty wages at around $6 per day for the minimum wage,” said Sarah Rogan, Oxfam’s advocacy lead. “For Mosaic not to pay for orders already fulfilled, means they have essentially worked for free.”
Uncertain Future
As FTI Consulting continues its assessment, the future remains uncertain for both Mosaic Brands and the factories it left unpaid. Suppliers are now wary of extending further credit, exacerbating the financial strain on already struggling factories.
“We only want what we earned,” emphasized Yasmin Laboni, encapsulating the frustration and desperation felt by many workers. The path forward will likely involve difficult negotiations and a push for greater accountability from international buyers to ensure that such crises do not recur.
