LPP Continues Business in Bangladesh: BGMEA Secures Deal to Help Exporters Recover $40M Dues

Dhaka, August 10, 2026 — Polish fashion brand LPP S.A. has reversed its decision to suspend business with Bangladesh — following a meeting with BGMEA leaders that produced a joint statement confirming the brand will continue operations and assist Bangladeshi exporters in recovering $40 million in unpaid dues from a Russian buyer.

🤝 BGMEA-LPP Meeting: Key Outcomes

The brand will continue its business as usual, Mahmud Hasan Khan Babu, president of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA), told The Business Standard. Following a meeting between BGMEA leaders and LPP representatives on August 10, both parties drafted a joint statement to officially announce the withdrawal of the suspension.

"They [LPP] will continue their business. However, it was decided that LPP will assist Bangladeshi exporters in recovering payments for goods shipped to a Russian company," the BGMEA president said.

📊 The Dispute: $40 Million Unpaid

The dispute stems from an estimated $40 million in unpaid export proceeds owed to around 40 Bangladeshi suppliers by a Russian company, FES Retail. Local exporters allege that LPP's Dhaka office facilitated the deals with the Russian buyer. After some exporters filed a lawsuit in a Dhaka court, law enforcement agencies reportedly raided the residences of several officials from LPP's Dhaka office — prompting the Polish brand to announce the suspension of its business with Bangladesh on July 30.

• 💰 Unpaid dues: ~$40 million
• 👥 Affected suppliers: ~40 Bangladeshi factories
• 📜 Russian buyer: FES Retail
• 🏢 LPP role: Dhaka office facilitated deals
• ⚠️ LPP suspension date: July 30, 2026
• 🏢 Bangladeshi factories supplying LPP: ~772
• 💸 Annual export value to LPP: $700+ million

🌏 Scale of LPP's Bangladesh Operations

Currently, approximately 772 Bangladeshi factories supply apparel to LPP, with annual exports exceeding $700 million — making LPP one of the largest single buyers of Bangladeshi garments. The suspension, even if temporary, would have been devastating for the supplier base — particularly at a time when the RMG sector is already grappling with the gas crisis, weak Christmas shipments, and a 5.75 percent decline in exports to the US market.

✅ What This Means for Exporters

The resolution represents a significant diplomatic victory for BGMEA — which managed to negotiate both the continuation of LPP's business AND LPP's commitment to help recover the $40 million in unpaid dues. For the 40 affected suppliers, the recovery process will now have LPP's direct involvement, which could significantly improve the chances of actual recovery compared to pursuing the Russian buyer alone through international courts.

For the broader RMG sector, the resolution removes a major source of uncertainty. The prospect of losing $700 million in annual orders from a single buyer would have accelerated factory closures and layoffs that are already occurring due to the gas crisis. With LPP back on board, those 772 factories can resume normal production planning for the European market — Bangladesh's largest export destination.