Polish retailer LPP faces $40 million payment dispute with Bangladeshi suppliers over Russian sales

Polish clothing group LPP is being sued by a consortium of about 40 Bangladeshi garment exporters for unpaid invoices totalling roughly $40 million. The exporters allege that LPP guaranteed payments for garments shipped to a Russian buyer through FES Retail, the former owner of LPP’s stores in Russia, and that LPP stopped those payments about 18 months ago despite continued deliveries.

LPP has denied the allegations, stating that it regularly settles all obligations to Bangladeshi suppliers and that the claims are misinformation. The company said it has sent a notice on 30 July suspending new orders while it conducts a comprehensive review of its sourcing strategy and explores alternative production locations. The Bangladeshi garment association, led by Mohammed Hatem, warned that LPP could be placed on a “black list” in Bangladesh if the dispute is not resolved. The controversy caused a brief dip in LPP’s share price, which closed about 1 % lower on the day the story broke.