8 Star Sportswear to Shut Cambodia Factory, 700 Workers Out by January 2027

Cambodia's 8 Star Sportswear Ltd will permanently close in January 2027, ending two decades of operation and cutting nearly 700 jobs at a factory that long supplied UK retailer Primark under duty-free access to the British market. The Federation of Free Trade Union of Workers of the Kingdom of Cambodia (FTUWKC) announced the closure in a Facebook post on Thursday.

For sourcing teams, the signal is order-driven: the factory has faced declining orders since the COVID-19 pandemic, according to independent labor specialist Say Sokny. Since early October, working hours dropped to four days a week, ending at 4 p.m., compared with previous overtime shifts running to 7 p.m.

What severance have workers secured?

The factory has agreed to pay all benefits required under Cambodia's Labor Law, per the FTUWKC. During the closure notice period, employees get two paid days off per week to search for new jobs.

"Workers are satisfied with the benefits that the factory is providing and the advance notice given," Oun Channy, 53, a worker representative with nearly 20 years at the plant, told CamboJA News. Some staff have already started job hunting — but workers aged 50 and above face real difficulties finding employment, she said. She estimated that age group makes up 20% of the workforce.

Ministry of Labor officials visited the factory to explain the closure process and offered job-placement help for older workers, though Channy said she was unsure how to access that assistance. Factory administrator Heng Sophy declined to comment and referred questions to the ministry, saying only that the closure followed the law.

Is Cambodia's garment sector actually contracting?

Ministry spokesperson Sun Mesa pointed to global and regional headwinds — the oil crisis, localized conflicts, operational disruptions and Cambodia-Thailand border tensions — as drivers of several factory closures. But he insisted the sector remains robust: in the first nine months of 2026, nearly 50,000 factories and SMEs operated nationwide, employing more than 2.3 million workers, including nearly 3,000 garment and textile factories with over 1.3 million employees.

"This is progress showing that Cambodia's garment sector remains healthy, continues to provide benefits and income, and providing employment opportunities for millions of our citizens," Mesa said. He added that nearly 90,000 vacancies exist across factories and enterprises in Phnom Penh and the provinces.

Sokny framed the pull differently: Chinese and Vietnamese manufacturers are moving operations to Cambodia as China faces high taxes and Vietnamese workers shift to higher-paid heavy industry jobs. "This $2 wage increase [this year] is an opportunity for factories to make significant profits because of cheap labor in Cambodia," she said, citing preferential access via the Regional Comprehensive Economic Partnership (RCEP). Experienced garment workers, she argued, can find jobs immediately.

What should buyers watch?

Sokny questioned whether lost orders alone drove the closure, suggesting working conditions, union rights or an aging workforce may have influenced international buyers — though she offered no evidence linking those factors. "Perhaps the brand's home country considered not placing additional orders because the factory may have had irregular or substandard working conditions," she said. She also floated the possibility that owners close older facilities to open new ones qualifying for government tax incentives.

Labor rights group CENTRAL has documented at least five closures in the first 10 months of 2026 — High Tech Garment Apparel, ML Intimate Apparel Cambodia, NIDEC Die-casting, Sahakreas Create Bridge Company and 8 Star Sportswear — affecting roughly 4,800 workers. "The resulting loss of income and employment security threatens workers' livelihoods, heightens their vulnerability to economic shocks, and increases the risk of indebtedness," program manager Khun Tharo said.

Tharo warned continued closures could signal declining investor confidence as Cambodia prepares to graduate from least developed country status. The open question for buyers: whether order losses are cyclical or a compliance-and-competitiveness story they need to price in.