Blog: H&M posts weaker results on poor weather
Petah Marian | 24 June 2013
H&M Hennes & Mauritz has signalled its intention to continue sourcing in Bangladesh despite the recent apparel factory disasters. Investor relations manager Nils Vinge said that while China remains the most important sourcing country for the retailer, and that it does look at new markets, it is not jumping from one country to another.
The comments came as the company recorded an 11% drop in second quarter profit, which fell to SEK4.66bn (US$727.2m). Sales edged down 0.1% over the period to SEK31.64bn. The company blamed poor weather and negative currency exchange for the results.
Meanwhile, Tesco revealed that it has stopped taking clothing from one of its supplier factories in Bangladesh after a structural survey of the site revealed serious safety issues. The move comes after the retailer embarked upon structural surveys of all factories it sources from in the country following the collapse of the Rana Plaza building in Dhaka in April.
The supermarket operator said it has stopped using 15 factories in the past 12 months after they failed to take "sufficient action" in response to its concerns.
In more positive Bangladesh news, Fast Retailing revealed it would open its first stores in the country, in partnership with Grameen Group's Grameen Healthcare Trust, a social enterprise that helps to address issues related to poverty, public sanitation, education, gender issues and the environment.
Products will be produced in Bangladesh using locally sourced materials, providing practical items in a range of colours made from soft and synthetic fibres - made by locals, for locals.
The two stores will tailor their offer to the specific needs of Bangladeshi consumers, offering a range of 32 items for men, and ten for women, for between US$2.50-15.50.
In a move welcomed by NGOs, the US government has downgraded Uzbekistan in its Global Trafficking in Persons (GITP) report to tier III, the worst ranking available, for its use of forced and child labour to pick the country's cotton crop.
Human Rights Watch said that under the US Trafficking Victims Protection Reauthorization Act (TVPA), President Barack Obama must decide within 90 days whether to apply or waive the sanctions mandated for Tier III countries. The NGO called for the US government to impose sanctions on the country if it fails to invite the International Labour Organization (ILO) to monitor the situation ahead of this year's harvest.
US apparel group PVH expects growth to accelerate once teething problems with the integration of the Warnaco business are addressed.
Speaking at the company's annual shareholders meeting last week, chairman and CEO Emanuel Chirico said the recently enlarged group has faced challenges clearing excess inventory, and upgrading Warnaco's operating systems the same level as PVH, requiring investment in IT and design.
Finally, sportswear giant Nike has announced a significant restructuring of its leadership team following brand president Charlie Denson's decision to retire in January 2014. Denson will be replaced by Trevor Edwards, who is currently EVP of brand and category management.
The move triggered at least 12 new appointments across the leadership team.
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