Japan's Uniqlo suspends most Bangladesh travel; others reviewing operations

Foreign companies with nationals working in Bangladesh's garment and building industries have suspended travel to the country and told workers there to stay at home after a deadly attack by Islamist militants on a restaurant in Dhaka on Friday.

The hospitality sector is also seeing cancellations, hotels are tightening security and foreign embassies are looking at reducing staffing after the attack claimed the lives of nine Italians, seven Japanese, an American, an Indian and some Bangladeshi nationals.

Fast Retailing Co, the Japanese owner of the Uniqlo casual-wear brand, said it will suspend all but critical travel to Bangladesh and has told staff there to stay indoors.

Bangladesh's $26 billion garment industry has been bracing for the fallout of Friday's killings, fearing major retailers from Uniqlo to Marks and Spencer and Gap could rethink their sourcing plans after the latest attack targeting foreigners.

One of the world's poorest countries, Bangladesh relies on garments for around 80 percent of its exports and for about 4 million jobs, and ranks behind only China as a supplier of clothes to developed markets like Europe and the United States.

Uniqlo has 10 Japanese staff in Bangladesh, one of its major production hubs outside China, and was among the first to confirm it will tighten travel restrictions already in place after attacks last year.

A spokeswoman said all but critical travel was suspended.

"Obviously this is generating a lot of concern with all the brands my company works with," said Shovon Islam, the head of Sparrow Group, which supplies top brands like Marks & Spencer and Gap.

He said that after a foreigner was killed in Bangladesh last year, some overseas companies had pared back travel to the country and asked for meetings to be held in Bangkok, New Delhi and Hong Kong instead.

"This time the intensity of the threat is much higher and we will definitely see companies altering their plans," Islam said.

‘Heartbreaking’

"There'll definitely be an impact on the garment industry," said Sudhir Dhingra, head of Orient Craft, based in the Indian city of Gurgaon. "I was just speaking to a top label which said its official who was supposed to visit Bangladesh to inspect an order has refused to go."

Bangladesh garment exporters who dealt with some of those killed in Friday's attack were still coming to terms with what had happened.

"I was doing business with six of the nine Italians who died. It's shocking and heartbreaking," said Meshba Uddin Ali, Managing Director of Wega Fashion Sweater Pvt Ltd.

Amos Ho, a senior manager at Pou Chen, one of the world's largest makers of trainers for brands like Nike, Adidas and Puma, said: "We've urged our employees to be cautious. They have to pay attention to their personal safety."

Industry analysts have suggested clothing brands may now consider shifting out of Bangladesh to less unsettled countries in Asia, such as Cambodia and Sri Lanka. No major companies have yet signalled official plans.

"There are no plans on changing any sourcing, but we are following developments closely," Sweden's H & M said in a Sunday statement echoed by other big retailers.

Reducing staffing

Both the United States and British embassies in Bangladesh may reduce staff numbers, one diplomatic source said, and ask only essential staff to stay on.

Japanese construction companies Obayashi Corp and Shimizu Corp, both with more than a dozen employees working on bridge projects in Bangladesh, said they advised staff to stay indoors.

At least two 5-star hotels in Dhaka, which cater primarily to business clients, said they had seen a spike in cancellations since Friday's attack.

"Whenever people book it's usually within two or three days of their visit to Dhaka and now nobody is doing any bookings at all," said a source at one of the hotels, noting this week is typically quiet due to the upcoming Eid celebrations.