Workers owe approximately Tk36 crore in wages and other benefits
Stylecraft Limited, a once-thriving garment manufacturer, is experiencing a rough fall from grace, with thousands of its workers and top officials left without months of salaries and bonuses as the company struggles to restart operations of its two shuttered factories.
Some 2,650 workers are grappling with uncertainty as they have not received their wages for the past four months. Despite no salaries, they continued to work, hopeful that their rightful dues would eventually be settled.
However, their hopes were shattered when the owners abruptly closed down both factory units, Stylecraft Limited and Youngones Bangladesh Limited.
The situation is even more dire for the top management, who are owed anywhere from a minimum of six months to a staggering 30 months in unpaid salaries, as disclosed by factory officials.
Furthermore, some top officials have already been dismissed by the company owners for their insistence on receiving their long-overdue wages.
In August, the owners fired its head of operations without prior notice, and some other top officials were denied access to the office network.
Then on 10 October, Stylecraft workers, in protest of unpaid wages, blockaded the Department of Labour’s head office in the capital.
After a four-day demonstration, they received assurances of payment by 22 October 22 and the factory’s reopening on 1 November. Stylecraft’s Director, Sharif Almas Rahman, committed to this timeline in an undertaking.
Khaleda Akhter, a Stylecraft operator, said she wanted to continue working despite four months of unpaid salary and partial Eid bonus, but the sudden, unannounced factory closure has left workers in limbo.
On the other hand, Mamun Hossain, a supervisor, no longer goes to the factory due to four months of unpaid wages and doubts the owner’s commitment to fulfilling their obligations.
Shams Almas Rahman, the managing director of Stylecraft, contends that only one month’s salary is overdue and some 700 workers have pending Eid bonuses.
They are actively seeking financial support from banks and investors to resume full operations, he said.
As per the attendance records, Stylecraft employs 1,722 workers and Youngones Bangladesh Limited employs 928, while both units have 336 and 142 executive staff and management officials respectively.
Stylecraft and Youngones workers collectively owe approximately Tk36 crore in wages and other benefits.
Youngones alone holds assets valued at more than Tk195 crore based on fair market value, as confirmed by the company’s accounts department documents.
Crisis before Eid-ul-Adha
Stylecraft’s troubles began to brew when the owners’ failed to pay regular wages and bonuses before this year’s Eid-ul-Adha.
After Eid vacations, workers demanded their arrears but the owners did not heed their cries, as a result sometimes they halted production for a few hours.
On 2 August, Stylecraft workers blocked the Dhaka-Joydebpur road near Rice Research Institute demanding their due salaries and arrears.
They returned home after getting assurance from Gazipur Metropolitan Sadar Police that the management would pay their dues.
Then on 10 September, in a letter to the industrial police, Stylecraft Senior Admin Manager Suja Uddin Ahmed wrote that they had decided to close the two factory units from 31 August in accordance with the Bangladesh Labour law 2006.
The letter also mentioned that due to ongoing worker unrest, vandalisation and harassing officials and factory owners the management decided to shut units and they also requested for security assurance.
Top officials in limbo
Following protests in Gazipur and Dhaka, workers are likely to receive their arrears next week, but management officials remain uncertain about when they will get their dues.
Two officials revealed that they were denied access to their offices without prior notice.
Feroz Kabir Khan, head of People and Culture at StyleCraft, stated that he owes around Tk70 lakh, including 30 months’ salaries, five bonuses, and other benefits, and is now consulting with lawyers.
Another top official, Iqbal Faruk Milky, who served as the head of operation, lost his job without prior notice. He expressed uncertainty about receiving his eight months’ salaries, two bonuses, and service benefits.
Managing Director Shams Almas Rahman acknowledged the officials’ overdue payments and mentioned that the first priority is to resume factory operations, with payments to officials being addressed subsequently. They are currently working on securing funds to pay workers.
The rise and fall of Stylecraft
Prominent businessman Shamsur Rahman established the medium-sized factory in Gazipur in 1983, listing the company on the stock exchange the same year.
He introduced his two sons to the business, with Sharif Almas Rahman joining in 1987 and Shams Almas Rahman in 2002. Both sons were later promoted to directors, with Shams Almas in 2010 and Sharif Almas in 2017.
In 2015, Stylecraft had its best year, boasting a turnover of Tk400 crore and record profits.
After Shamsur Rahman’s passing, Shams Alam took over as the company’s managing director, expanding production and making investments.
However, the company’s fortunes declined, with a 50% drop in business in FY20 and ongoing worker unrest due to irregular wage and Eid bonus payments.
In mid-June 2021, the factory temporarily shut, paying off employees.
Six months later, it resumed production with new orders but faced challenges despite increasing demand.
In 2019, Shams relocated a second unit, Youngone Bangladesh Ltd, within the Stylecraft building, aiming to boost business.
However, the company’s revenue fell to Tk200 crore in the 2019-2020 fiscal year due to the Covid-19 pandemic.
The downward trend continued into the 2020-21 fiscal year, with a 39% revenue decline to Tk125 crore, marking the company’s first failure to pay dividends to its shareholders.
According to Stylecraft (Unaudited) Financial Statement till 3rd Quarter FY2023, its turnover was only Tk93.66 crore.
