Blog: Leonie BarrieH&M backs Bangladesh wage hike

Leonie Barrie | 10 September 2012

Swedish fashion giant H&M last week took steps to try to tackle the violent strikes and disruption that have plagued the Bangladesh garment sector in recent years - by calling on the country's government to raise minimum wages and to carry out annual wage reviews.

Following a meeting with the Prime Minister, H&M CEO Karl-Johan Persson noted that the Bangladeshi government is the only body with the power to increase the minimum wage.

He added that increasing the minimum wage would help to create more jobs in Bangladesh, and called for a stable market "in which people are treated with respect, and where the workers are properly compensated by their employers."

Bangladesh's cheap labour cost is one of the biggest lures for retailers, but it also steals business from other garment producing centres. Sri Lanka hopes it can compete by setting up no-frills, low cost, apparel manufacturing units in rural parts of the country.

Sri Lankan apparel giant Brandix Group also says efforts to boost the sustainability of its operations have given it a significant competitive advantage. And the Timex Group is expanding its manufacturing business by moving into own-brand labels - one of which has been launched at UK retailer BHS.

But in an industry where "price is king" and "fast fashion is also cheap fashion," any moves to re-shore the US garment manufacturing sector will not be easy. Spurred by the administration's attempts to create more jobs in the country, the growth of garment production in the US is a topic under increasing discussion.

On the retail front, JC Penney has once again reiterated that it remains committed to its ongoing transformation, including the implementation of in-store shops. Speaking to investors last week, the department store retailer said it was pleased by "encouraging results" in the first few weeks of August - and that RFID will be key to inventory control.

Major clothing retailers, brands and importers across the board are benefiting from the data collection and management options offered by new technology in labels - especially radio frequency identification (RFID) tags. Not only does this represent a fundamental piece of the production process that can be leveraged to save money and increase sales, but the technology, too, is becoming increasingly sophisticated - as just-style's September management briefing reports.


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