Blog: Bangladesh fire brings safety back into spotlight
Petah Marian | 3 December 2012
A fire in a Bangladeshi factory last week, which killed at least 111, has brought factory safety back into the spotlight. The fire, which raged through Tazreen Fashion in Ashulia, on the outskirts of Bangladesh's capital Dhaka, was producing garments for Wal-Mart, C&A, Li & Fung, and Piazza Italia.
The tragedy was not an isolated incident, with more than 350 perishing through ten other fires in Bangladesh since 2005, and another 300 losing their lives in factory fires in Pakistan in September this year.
The latest fire has prompted calls from trade unions and labour rights groups for immediate action from international brands who source from Bangladesh.
The fire was not the only example of human rights abuses last week, with a tribunal taking place in India to discuss poverty, pay, harassment and abuse in factories that make clothes for Western brands and retailers.
Around 250 garment workers from Bangalore, Gurgaon and Tirupur attended, as did international brands including H&M and Adidas, who were joined by government representatives.
Workers spoke out about sexual harassment, verbal abuse, low wages, and the endemic problems around overtime and the right to join a union.
Meanwhile, Zara owner Inditex joined an industry-wide initiative that will see it cut hazardous chemicals from its clothing by 2020. The decision follows a report by Greenpeace that accused the brand of selling clothing that contain the dangerous chemicals. The move will see the fast fashion operator become increasingly transparent by publishing chemical use and discharge information from many of the factories it uses.
The retail side is also facing challenges, meanwhile, with a strong performance over Thanksgiving and Black Friday week sales offering little match for the disruption caused by Hurricane Sandy.
Terry Lundgren, the chairman, president & CEO of Macy's - which recorded a 0.7% decline in same-store sales decline over the month - summed up the situation for many retailers: "Despite the largest-volume Thanksgiving weekend in our company's history, we were not able to overcome the weak start to the month, which included the disruption of Hurricane Sandy. Yet," he noted, "we remain on track to deliver a very strong sales performance in the fourth quarter, consistent with our guidance."
PVH, however, recorded a positive third quarter, as sales of its Calvin Klein and Tommy Hilfiger brands compensated for a decline in demand for its heritage brands. In a call with analysts, chairman & CEO Emanuel Chirico backed Warnaco's plans to turnaround the Calvin Klein jeans and underwear businesses, a company it is set to take over next year in a deal worth US$2.9bn.
"I think Warnaco has been very transparent about the challenges in [the jeans] business, particularly in Europe, and some of the difficulties that they have worked through in North America," he said. "And I think a number of the initiatives that they have put in place really will start to benefit next year, particularly in the second half of the year."
Finally, just-style published a research report last week that suggested emerging markets are set to drive growth of the performance outdoor apparel sector - a segment that is set to grow by US$3.5bn over the next six years. While North America, Europe and Asia are the current top three performance outdoor apparel markets, the rapid economic growth and expanding middle classes in China, South Korea and Hong Kong are set to help the market develop further.
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