6,000 jobs go as Hong Kong’s Must Group closes plant in Dhaka EPZ

Dhaka (Feb 7, 2021): Lenny Fashions Limited, a subsidiary of Hong Kong-based Must Group, has shut down its apparel manufacturing plant in Dhaka Export Processing Zone, leaving the livelihoods of around 6,000 employees uncertain.

Interestingly, owners of the factory want to pay off workers after selling the plant and assets to a new buyer.

“This is to inform that Lenny Fashions Limited has been declared closed from 1st Feb 2021. The payment for final settlement of the workers will be made after the sale of the factory,” said its chairman in a notice.

But Bangladesh Export Processing Zones Authority or BEPZA has refused Lenny’s payment plan as it may take months to find a buyer to sell the factory.

“It will take time to sell the factory and workers cannot remain unpaid during this period,” Nazma Binte Alamgir, the BEPZA spokesperson, told Business Insider Bangladesh on Sunday.

“We've suggested them (Lenny) to pay workers’ dues from the provident funds,” she said. Lenny’s all assets in the factory will be under BEPZA’s control, Nazma said.

Also, Lenny did not follow the procedure in its application to BEPZA seeking a ‘no objection certificate’ for the sale, she mentioned.

There are around 6,000 employees working in the factory consisting of three units in a 350,000 square feet area. The plant has the capacity to produce 650,000 dozens of ladies' bottoms and tops and men’s bottoms per year. The factory also has an in-house embroidery plant, laundry, and a fully equipped laboratory.

What has pushed Lenny Fashions to get sold?

Declining orders due to the onslaught of the Covid-19 pandemic is a big reason for the fall of the factory and its mother organization, Must Group. The group also closed down its plants in Jordan recently after failing to get adequate orders, according to an insider of the company.

The fall of 118-year US-based retail giant JCPenney has fostered the collapse of Lenny as the US company was a major buyer of Lenny’s apparel products.

In May 2020, JCPenney became one of the largest retailers to file for protection in bankruptcy court amid a wave of store closures forced by the rapid outbreak of Covid-19 infections in America.

Later in December last year, JCPenney emerged from Chapter 11 bankruptcy in a deal that leaves Simon Property Group and Brookfield Asset Management Inc in America as the owners and operators of the department store chain. But that could not save Lenny Fashions from death.

Which is Must Group?

Lenny’s owning company Must Group was founded in 1981 and started as a small family business with one office and a handful of employees in Hong Kong.

Today Must is an international corporation with more than 20,000 employees. With global offices and manufacturing facilities located in the USA, UK, Hong Kong, China, Bangladesh, and Jordan we produce over 60 million garments annually, according to its website.

What does Must make?

The group claims that it is one of the largest manufacturers of bottoms in the US market. Main product categories include casual pants and shorts, denim jeans, activewear, dress pants, and jackets. Must makes products in both woven and knit fabrics for women and men.