Blog: Leonie BarrieClothing key to rebuilding Haiti?

Leonie Barrie | 22 February 2010

In the quest to rebuild earthquake-torn Haiti, US brands and retailers are being urged to source at least 1% of their total apparel production from the country. The programme, entitled Plus 1 for Haiti, was launched last week by US Trade Representative Ron Kirk and executives from companies including Hanesbrands and Gap. The initiative aims to build on the Haitian Hemispheric Opportunity Partnership Encouragement Act, known as HOPE II, which allows duty-free access to the US for Haitian-made apparel and other articles.

For EU based companies sourcing apparel from Sri Lanka, however, the European Union (EU) has finally set a deadline for withdrawing the country's GSP+ trade benefits - a move that could also lead to higher prices on some garments. From mid-August Sri Lanka is due to lose the benefits, which have given its apparel exports zero duty access to the EU since 2005, over its poor human-rights record.

But the uncertainty for retailers and importers looks set to continue after the EU described the suspension of GSP+ as "temporary," with the next six months giving Sri Lanka "extra time to address the problems identified." Whether Sri Lanka wants to engage in talks to regain the concession remains to be seen though. It is not thought to be a high priority for the new government, and it'll have to show evidence of some significant changes.

The continuing economic downturn in Spain has forced UK luxury goods company Burberry to take evasive action by closing a facility in Barcelona with the likely loss of around 300 jobs. The move is part of an overhaul of Burberry's Spanish operations and will see it stop designing collections exclusively for the local market. It will sell its global lines there instead.

Meanwhile German fashion firm Hugo Boss has been caught up in mud-slinging with unions over the decision to close its only US production facility next month. It says there is "no alternative" to the move, which will see the loss of 310 jobs at the plant in Cleveland, Ohio. But unions claim the plant is still profitable, and that Hugo Boss wants to save costs by moving production to Turkey or Eastern Europe instead.

US retail giant Wal-Mart, however, struck an upbeat note on the performance of its namesake US business, despite posting a 1.6% drop in fourth quarter same-store sales. CEO Mike Duke admitted that he was "disappointed" with the company's fourth quarter domestic sales performance, but added: "I am really proud of their underlying operating performance." The company still managed to post a 7% increase in full-year earnings.


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