Unpaid Millions: Aussie retail group’s collapse hits Bangladesh RMG factories

Special Report :

In a bustling industrial district on the outskirts of Dhaka, Padma Satel Arab Fashions, a seven-storey factory producing jeans for Australian fast fashion brands such as Millers, Rivers, and Rockmans, hums with activity. Yet, its future is uncertain.

Mosaic Brands, the Australian parent company of these labels, recently defaulted on $2.5 million owed to the factory. This is part of a larger debt of over $30 million across 23 factories in Bangladesh, India, and China, following Mosaic’s decision to enter voluntary administration last month, reported abc.net.au news.

Jabed Ahmed, Director of Padma Satel Arab Fashions, expressed despair: “We have been asking for overdue payments since June. They blamed poor sales but urged us to continue shipments, promising payment soon. Without this money, survival is impossible.”

The factory’s 3,000 workers now face an uncertain future. Yasmin Laboni, a 26-year-old worker, fears she won’t be able to support her two children.

“Our owner can’t pay us out of his pocket. At best, some workers might be retained,” she said. “This will affect everyone – food, healthcare, clothing – everything will become unaffordable.”

Factory manager Mohammad Alam Mia warned of inevitable mass layoffs. “All we ask is that foreign buyers honour their commitments,” he said.
Mosaic announced in September that it would close five of its brands-Rockmans, Autograph, Crossroads, W.Lane, and BeMe-to focus on its core labels.

In October, the company entered administration, claiming a need to restructure for long-term success. Administrators from FTI Consulting are assessing its viability, with outcomes possibly including asset sales or liquidation.

Unsecured creditors, including overseas suppliers, remain uncertain about payment. Ahmed criticised Mosaic’s aggressive practices, noting their demand for 120-day payment terms-four times the industry standard.

Bangladesh’s garment industry, which employs 4 million people and generates $34 billion annually, is already under pressure. After Mosaic’s default, the Bangladesh Garment Manufacturers and Exporters Association (BGMEA) sought intervention from Australia’s High Commission but was advised to seek legal counsel.

“This sets a damaging precedent,” said Mohiuddin Rubel, a former BGMEA director. “If Australian brands ignore obligations despite repeated reminders, it undermines trust.”

Suppliers highlighted Mosaic’s double standards. “They demand compliance with stringent worker rights and safety standards but exploit us without consequence,” said Hydroxide Knitwear owner Ohmar Chowdhury.
The fallout has been devastating for workers, who earn around $6 a day. Oxfam Australia’s Sarah Rogan noted that Mosaic’s actions have left many effectively unpaid.

Laboni voiced a simple plea: “We are not asking for charity. We only want what we’ve earned-the wages for our hard work.”