Bangladesh feels retailers' wrath
5th February 2010 18:39

Is it any coincidence that Wal-Mart’s International CEO has paid a short and unannounced visit to Bangladesh just as 11 global retailers called on the Bangladeshi Prime Minister to take “swift action” over the country’s notoriously low wages for garment workers? The retailers, including Wal-Mart, fear the strikes, protests and factory closures that seem to be endemic in Bangladesh are a risk and could taint their reputations as socially responsible companies.

One company that knows how damaging this can be is UK fashion chain Primark, which is a regular target for campaign groups. It was most recently accused of using Bangladeshi sweatshops in the capital Dhaka where garment workers were paid as little as GBP19 a month – less than half a living wage – making its T-shirts, skirts, trousers and babywear.

Local media in Bangladesh are hopeful that Wal-Mart’s visit could be a precursor to the US retailer increasing its sourcing from Bangladesh – after all, it has outlined changes in the last few days to shake up its sourcing policy to cut costs by 5-15% within five years. 

But it’s unlikely the retail giant would take such a step to up its investment in the country while there’s so much at stake. And Wal-Mart is also leading the way with a pledge to make every factory feeding into its supply chain to drive up social standards. So there’s a lot to lose if it’s credibility takes a hit.

But Walmart apparently buys over a billion dollars worth of readymade garments from Bangladesh annually – a staggering 30% of Bangladesh's garments exports to the US. And if this isn’t enough to persuade the industry to change its ways, then there’s little hope for anyone else.

BANGLADESH: Retailers urge action on garment wages

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Wal-Mart in sourcing shake-up
1st February 2010 17:56

With retail sales slowing around the world, sourcing is subject to stringent cost reviews like any other business operation. And for many firms, one of the easiest ways to shave overheads – as well as generating knock-on gains like speed to market – is to offload some or all of their sourcing interests to focus on their core retail concerns.

This is exactly what has happened with US retail giant Wal-Mart Stores Inc, which last week agreed a strategic alliance with Li & Fung as part of a shake-up of its global sourcing structure in a bid to reduce costs, improve quality and accelerate its speed to market.

Under the deal, Li & Fung is forming a new company to manage the Wal-Mart account and will act as a buying agent for goods valued at around $2bn within the first year. “We are redefining how we source products that are imported into Walmart retail markets around the globe,” Wal-Mart said of the deal.

Elsewhere, retailers and certification groups have gone on the offensive after a German newspaper report last week claimed that clothing labelled as “organic cotton” by some major retailers contained genetically modified cotton from India. The allegations prompted H&M to say it had no reason to believe the organic cotton used in its garments was grown using genetically modified seeds. While fashion chain C&A said it was investigating the claims.

Cotton certification group Control Union, meanwhile, argued that the data was skewed. Whatever the outcome, the charges highlight the problems of trying to improve the integrity of the organic cotton trade, the challenge in verifying organic claims – and just how easy it is to undermine credibility in this growing and lucrative market.

Trade and environment specialists at last week’s UN Conference on Trade and Development (UNCTAD) believe the eco-fashion segment will post big gains over the next decade as consumers buy more environmentally sustainable and ethically produced goods. But they also acknowledge that uptake will be determined by how fast manufacturers adjust their production towards the new ethical model, and how quickly prices are lowered to compete with conventionally manufactured apparel.

And in a bid to help develop more sustainable solutions across a range of products, sportswear maker Nike has teamed with nine other companies to launch web-based marketplace GreenXchange (GX) to share intellectual property (IP) such as patents with other firms. The idea is to create a forum for technology, with Nike promising to share more than 400 of its patents via the portal.

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Li & Fung wins with Wal-Mart
28th January 2010 19:05

With retail sales slowing around the world, sourcing is subject to stringent cost reviews like any other business operation. And for many firms, one of the easiest ways to shave overheads – as well as generating knock-on gains like speed to market – is to offload their sourcing interests to focus on their core retail concerns.

Perhaps the biggest beneficiary of these new outsourcing opportunities has been Li & Fung, which has already gained significant market share through an accelerated flow of outsourcing deals from the likes of Timberland, Mexx, Liz Claiborne and, most recently, Hudson's Bay Trading Company (which owns the Lord & Taylor stores) and women’s wear retailer The Talbots.

But the icing on the cake must surely be its first direct sourcing deal that's just been agreed with Wal-Mart, which could buy $2bn worth of goods through the Hong Kong firm in its first year. 

“When things are good, there's no need to change and there's inertia. People are very comfortable with their supply. But when things are bad, people look for alternative ways of doing things,” Li & Fung president Bruce Rockowitz told just-style last year.

Even so, more of those outsourcing deals – and more large-scale acquisitions too – will be crucial if Li & Fung is to accomplish the targets of its current three-year plan (2008-2010), which includes achieving annual turnover of US$20bn and a core operating profit of US$1bn.

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From T-shirt to ‘e-shirt’
22nd January 2010 18:28

An exciting new development could take the concept of wearable electronics to a new level after researchers managed to turn ordinary cotton and polyester fabrics into rechargeable batteries by dyeing them with an ‘ink’ made of carbon nanotubes.

Until now, clothing designed with built-in switches or joysticks to control equipment for electronic entertainment, particularly iPods, has tended to be bulky and inflexible. The key components are smart textiles which are sensitive to pressure, and which can be stitched, stapled or glued.

There are also special conductive yarns which can be woven into a textile to control electronic devices – but all of these are new textiles offering new functions through the integration of technology.

The latest approach turns this on its head by taking ordinary fabrics and simply and cheaply turning them into materials that store electricity. The fabric is simply dipped into a batch of nanotube dye, which maintains an electrical connection across the whole area of a garment. And crucially, the fabrics retain their flexibility, stretch and handle even after repeated laundering.

Clearly there’s still a lot of work to be done on the concept, but it seems to be one step closer to being able to power an iPod or MP3 player by simply plugging it into your jeans or T-shirt.

The new application to fabrics is reported in the journal Nano Letters

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Makers assess Haiti quake damage
18th January 2010 12:49

Apparel firms with ties to Haiti have rallied with offers of support for local colleagues and suppliers after an earthquake devastated the country's capital city last Tuesday. But they also admit the impact the earthquake has had on the region means it is likely to have lasting economic reverberations – not least for the clothing industry which is the single largest sector in the Haitian economy.

Industry executives told just-style that Haiti's crucial apparel industry has seen production fall 50-70% in the wake of the earthquake, and that it will take at least three months for most of it to resume. Many factories have been destroyed and the country's main port is paralysed, keeping the bulk of its production at bay.

Before the disaster, Haiti was the seventeenth largest supplier by volume of apparel products sold in the United States, with exports valued at $412m in 2008, helped by its close proximity, low-cost production and a beneficial trade pact. Rebuilding its apparel industry will now be key to reconstructing Haiti after this devastating event.

In other news, more robust Christmas trading figures from Tesco, Primark and Debenhams seem to support the British Retail Consortium’s view that December’s sales were “stronger than we dared hope for.” In fact, wintry weather provided such a boost to UK clothing and footwear sales last month that they helped lift total sales to a five-year December high, while like-for-like sales rose 4.2% from the same month a year earlier.

Supermarket giant Tesco enjoyed its strongest Christmas trading in three years, with growth in clothing helping to boost group sales by 7.5%. Value clothing retailer Primark saw sales rise 19% in the 16 weeks to 2 January, while transactions at Debenhams were up 1.6%.

But all continue to warn that the rise in VAT, pending General Election and economic worries continue to herald uncertainty in the year ahead.

Buoyant clothing sales also helped US retail revenues to beat expectations of a holiday decline, according to the National Retail Federation (NRF). Preliminary figures suggest that holiday sales – covering the months of November and December – were up 1.1% on last year to US$446.8bn. Apparel was a key driver of sales, with revenues from clothing and clothing accessories stores rising 7% year-on-year in December.

But as Swedish fashion retailer H&M has found to its cost, actions speak louder than words after it was caught dumping unworn garments outside a New York store. The retailer has now vowed to improve its disposal of ‘damaged’ garments, and to donate as many as possible to charitable groups. The discovery is particularly embarrassing for the firm which has built a reputation for environmental and social responsibility.

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