Blog: Leonie BarrieDhaka attack deals new blow to Bangladesh

Leonie Barrie | 11 July 2016

Two terrorist attacks in Bangladesh over the past week have left the country's key garment industry in turmoil, with buyers rethinking travel plans and potential economic fallout for a sector reliant on foreign investment. Observers say the sector must now join with the government in taking a lead on security and economic issues if it is to continue to thrive and attract customers.

The uncertainties come as Bangladesh’s appeal as a source of apparel continues to grow. The country, the third-largest supplier to the US, saw the volume of its shipments rise 2.5% in May.

Apparel imports into the US from other countries also bounced back during the month, with over half of the top-ten supplier countries booking growth. Indonesia led the field with a double-digit increase, while Vietnam saw a reversal from its decline the month before.

But US imports from Cambodia recorded the largest decline in May. The figures coincided with a report from the ILO’s Better Factories Cambodia (BFC) initiative that transparent reporting of garment factory compliance is contributing to better conditions – although the top issues remain ongoing.

And renewed interest in a US law banning the entry of imported goods made with forced or indentured labour requires manufacturers, US importers, brands and retailers to take close scrutiny of their supply chains.

Environmental action group Greenpeace has expressed concerns the textile and apparel industry is not doing enough to meet its goals of going toxic-free by 2020 – and suggests part of the problem lies with "flawed" chemical lists.

The comments follow the group's annual 'Detox Catwalk' assessment of progress by 19 major fashion brands and retailers who have committed to remove toxic chemicals from their supply chains in four years' time. While Inditex, H&M and Benetton have been praised for their efforts, Victoria's Secret, Esprit, Nike and LiNing were found to be lagging.

And around 75 companies have now signed up to Dutch agreement on international responsible business conduct in the global garment and textile sector, aimed at improving labour rights and worker conditions.

But workers in Southeast Asia's textiles, clothing and footwear industries are at the highest risk of losing their jobs to the rise of automation, according to new research, with those in Vietnam and Cambodia most vulnerable.

Experts also warn that setting up a sustainable supply chain is not a simple task. Indeed, deciding where to source materials, where to manufacture, how to monitor facilities to make sure they are compliant, and how to transport the goods, are all challenging questions that are considered in our latest management briefing.

A new report from just-style also takes a look at the production approval process, the most critical but least acknowledged link in the entire apparel supply chain. The report, 'Too Many Standards: A practical guide to navigating the production approval process,' suggests communication, empowerment and delegation are all keys to success.

The report will not be on sale until next month – but is available now as part of a new just-style subscription deal. Click here for more details.

June proved to be a more positive month for the few US apparel retailers who still report their monthly sales, thanks to better weather conditions and the Memorial Day holiday shift.

For Gap, the month also marked the end of a 14-month run of negative same store sales, helped by a 5% rise in comparable sales at Old Navy.

And in other news, global cotton prices are seen edging up slightly; Marks & Spencer's first-quarter clothing sales fell by nearly 9%; and fears over Brexit contributed to the British fashion market declining for the first time in six years.

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