Swedish fast-fashion giant notifies more than half a dozen factories of business termination, leaving long-standing partners facing an uncertain future as the retailer moves to diversify its global sourcing strategy.

H&M, one of the largest buyers of readymade garments (RMG) manufactured in Bangladesh, has begun cutting commercial ties with a number of its local suppliers, industry insiders have confirmed.

The Swedish retail group has formally notified more than half a dozen factories of its intention to terminate business relationships, sending shockwaves through a sector already contending with shifting global trade dynamics.

The managing director of an export-oriented composite knit textile unit based in Bhaluka, Mymensingh, confirmed that his factory received a formal termination notice from H&M approximately one week ago.

‘We have worked with H&M for more than two decades, and they have now informed us that they will no longer source from us. We maintain a good relationship of 21 years of business, and we will now be in a dire situation as a good portion of our factory capacity has been engaged in producing garments for H&M,’ managing director of the factory said.

The factory owner, who spoke on Wednesday, said H&M has not provided any explanation for the termination.

He said that the buyer has agreed to receive goods for the current season and some orders placed for the next season, providing limited short-term relief.

His firm has since reached out to H&M seeking clarification, but had received no response.

H&M’s Bangladesh country office could not be reached for comment.

Industry figures warn that the terminations disclosed so far may represent only the beginning of a broader review.

Sources within the RMG sector allege that a considerably larger number of factories could be on H&M’s list, as the Swedish group pursues a strategy to spread its sourcing operations across multiple countries and reduce its exposure to any single manufacturing hub.

Bangladesh has long been among H&M’s most important sourcing destinations, owing to its competitive labour costs and large-scale production capacity.

Any significant retrenchment by the retailer would be felt acutely across the country’s $47 billion RMG industry, which accounts for roughly 85 per cent of total export earnings.

The development comes at a delicate moment for Bangladeshi garment exporters, who have been navigating pressures including shifting compliance requirements from Western buyers, rising input costs, and intensifying competition from rival sourcing destinations such as Vietnam, India, and Cambodia.

H&M has in recent years publicly committed to a sourcing diversification policy, citing the need to build supply chain resilience in the face of geopolitical uncertainty and logistical disruption.

Industry analysts note that this strategy, while commercially rational for the buyer, carries significant implications for supplier factories that have built their operations around long-term relationships with the Swedish retailer.