A planned trimming of the leading global retail corporation, Walmart, under ‘portfolio management’ might impact on Bangladeshi apparel export to the US market, trade-insiders said. The company declared Friday its plan to close down 269 stores in the USA and across the globe under its recent cost-cutting move. In October 2015, the company had said an active review of the portfolio was underway to ensure assets were aligned with strategy. The recent action follows a thorough review of Walmart’s nearly 11,600 worldwide stores that took into account a number of factors, including financial performance as well as strategic alignment with long-term plans. “Actively managing our portfolio of assets is essential to maintaining a healthy business,” said Doug McMillon, president and CEO, Wal-Mart Stores, Inc. The Walmart Newsroom further quoted the CEO as saying: “It’s important to remember that we’ll open well more than 300 stores around the world next year. So we are committed to growing, but we are being disciplined about it.” Bangladeshi garment sector-insiders predicted that the cost cutting (portfolio management) of Walmart might cast impact on RMG export to the United States. The USA imports RMG worth US$ 5 billion annually from Bangladesh and Walmart alone accounts for 20 per cent (US$ 1.0 billion). Anwarul Alam Chowdhury Parvez, managing director of Evince Group, a leading exporter, told the FE that the impact of Walmart’s cost-cutting measure would not be felt immediately but in coming days. He said the company has already started expansion of its operations in Vietnam. “They will not minimise orders from Bangladesh immediately but the annual growth might remain static for Bangladeshi products,” he said. He also predicted that prices for Bangladeshi products might face further decline due to Walmart cost cutting. However, the latest report of the US Department of Commerce Office of Textile and Apparel (OTEXA), said Bangladesh exported 1720 million square metres of clothes worth US$5.0 billion in January-November period of the last calendar year to US—an 11.41 per cent growth compared to that of overall income in 2014. The OTEXA data showed that per-unit clothe price was $3.0 in 2014 which declined to $ 2.9 in 2015 -3.34 per cent plunge. When contacted, President of BGMEA Md Siddiqur Rahman told the FE said that the order might increase from Walmart or shift to other countries like Vietnam or Ethiopia and others. “It is depending on how we would tackle the condition,” he pointed out. Another exporter, Mohammed Nasir, Managing Director, Evergreen Sweaters Ltd, told the FE that the company (Walmart) hasn’t made any declaration on cut in imports. When contacted, an official at Walmart Bangladesh, requesting anonymity, said there is no possibility now of cutting order from Bangladesh. “Bangladesh office hasn’t been informed yet on any kind of plunge in orders from here,” he said.
