Stylecraft Limited, a Bangladeshi RMG manufacturer is now back in the green after posting regular losses for the last 18 months. A major exporter, it’s decline surprised many for a company that clocked peak revenues of Tk400 crore in 2015.
The sponsors further increased their capacities given surging sales but in 2019-20 the annual revenues of the company dropped to Tk200 crore. The decline was attributed to the impact of Covid-19. But this was not the only reason in 2019 its major buyer Japan-based Uniqlo discontinued placing orders with Stylecraft. Uniqlo accounted for 60 percent of its total orders.
It was a severe blow for the RMG producer that started its downslide. The company started defaulting on workers’ salaries. The workers started protesting after a while when the dues started accumulating. The manufacturing facility was closed in July 2021. It was opened five months later in December 2021 after arranging bank loans. The workers were promised that their 20 percent past dues would be cleared and the company is honoring the deal.
The company however continued posting losses. The reversal started in July this year. In the first quarter of this fiscal year, the company posted 396 percent profit (from a lower base) with revues reaching Tk34.52 crore and a net profit of Tk4.48 lac.
The company started production with 9 lines out of 42 line capacity, exporting RMG to Europe, America, India, Japan, South Korea, and the Middle East. Initially, it hired 1000 workers. The strength of workers has been increased to 400 now.
RMG experts advise garment manufacturers not to depend on one or two buyers but look for 10-12 buyers preferably from different regions to manage risks.
