Shares of luxury brands that rely on Bangladesh for their product sourcing, such as PVH Corp. PVH, Ralph Lauren Corp. RL, and The Gap, Inc. GAP, have taken a hit in pre-market trading following political upheaval in Bangladesh.
What Happened: According to Benzinga Pro, PVH Corp., the parent company of brands such as Tommy Hilfiger, Calvin Klein, and Michael Kors was trading 3.91% lower during Monday pre-market, while Ralph Lauren Corp. was trading 4.48% lower at the same time. The Gap, Inc. was also trading 6.45% lower during pre-market.
The Prime Minister of Bangladesh, Sheikh Hasina, has reportedly stepped down from her position and left the country in the wake of violent anti-quota protests. The military has assumed control, with Army Chief General Waker-Uz-Zama announcing the establishment of a temporary government, BBC reported.
“We will investigate all the killings and punish the responsible,” he said.
“I have ordered that no army and police will indulge in any kind of firing… Now, the students' duty is to stay calm and help us.”
Indian media reports confirmed that the former Bangladesh Prime Minister landed near Delhi at 5:36 pm (local time) on Monday, along with her sister.
Why It Matters: Protests that began last month against civil service job quotas have escalated into widespread calls for the 76-year-old prime minister to step down. The unrest has resulted in the deaths of approximately 300 people over the past month, with nearly 100 people killed on Sunday alone. The political instability marked a period of unprecedented violence in the South Asian country since its formation in 1971.
Hasina, who has been in power since 2009, won her fourth consecutive election in January. Her government has been accused by rights groups of misusing state institutions to maintain power and suppress dissent.
Despite the top court’s decision to scale back the quota scheme, protests have intensified. On Monday, protesters defied security forces enforcing a curfew, marching on the capital’s streets after the deadliest day of unrest since the demonstrations began last month.
Despite the barricades set up by soldiers and police, vast crowds flooded the streets of Dhaka. The local Business Standard newspaper estimated that as many as 400,000 protesters were on the streets.
Clothing Industry Relies Heavily on Bangladesh: Internet access was heavily restricted on Monday, offices were closed, and over 3,500 factories servicing Bangladesh’s economically vital garment industry were shut down.
Bangladesh’s political instability has a direct impact on the operations of high-end fashion brands that source their products from the country. The current situation could potentially disrupt the supply chain, leading to delays in production and delivery, thereby affecting the bottom line of these companies.
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Photo via Wikimedia Commons
This story was generated using Benzinga Neuro and edited by Pooja Rajkumari
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
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