Blog: Leonie BarrieCambodia issues could put country's sourcing status at risk

Leonie Barrie | 2 June 2014

Major global brands and retailers that source clothing from Cambodia issued a stark warning last week that ongoing political instability, and alleged human rights violations could hurt future growth, and put the country's status as a strategic sourcing market at risk.

The concerns were voiced by companies including H&M, Gap, Puma, Levi's and Inditex, after a meeting with government representatives in Phnom Penh. Levi Strauss also confirmed to just-style that it has already started scaling back orders from Cambodian garment factories.

However, the IndustriAll union suggested some brands would be prepared to factor in the cost of higher pay if the minimum wage was raised.

The meeting was timed to take place days ahead of a long-awaited verdict in the trial of 23 Cambodian union leaders and garment workers arrested in January, after protests for higher wages turned violent. In a judgement that has been widely welcomed, the court freed the activists, handing out suspended sentences instead.

Over in Bangladesh, the first round of inspection reports released by the Alliance for Bangladesh Worker Safety show that "dozens of deficiencies" have been identified in every garment factory. The group now has just six weeks to release data on the remaining 600 factories supplying its member companies.

France's public prosecutor has opened a preliminary inquiry into whether supermarket giant Auchan misled consumers on conditions under which its clothing was manufactured. While the retailer denies any links with Rana Plaza, it has updated an action plan to combat the problem of unauthorised subcontracting.

Transparency and integrity are two words that crop up repeatedly in a special just-style interview with William E. (Chip) Connor, chairman and CEO of Hong Kong based global sourcing specialist William E. Connor & Associates Ltd. He not only discusses the company's ethical stance, but also shares his insight into worldwide sourcing shifts, opportunities, challenges and concerns.

More details have also emerged on the potential treatment of textiles in the Transatlantic Trade and Investment Partnership (TTIP), with officials from both the US and European Union (EU) confirming that talks so far have covered tariffs and greater convergence of regulatory approaches - but nothing yet on rules of origin.

Do the biggest companies also have the best supply chains - or should it be instead that the best supply chains help grow the most successful companies? It's quite a question, but there's no doubt that there's a connection between the two.

Meanwhile, struggling retailer Abercrombie & Fitch finally appears to have taken a step in the right direction, after efforts to revitalise its women's wear boosted its first quarter. Next plans in the pipeline are to improve test and react, expand fabric platforming, and lower average unit cost.

And retailer Aeropostale could benefit from better sourcing by tapping into the resources of another investment of private equity firm Sycamore Partners, which has just closed a financing deal with the teen apparel chain.

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