Blog: Leonie BarrieUnrest presents a serious challenge

Leonie Barrie | 3 February 2014

Ongoing political unrest in Thailand has not yet impacted the country's garment industry - but the unstable environment presents a serious challenge moving forward, just-style has been told.

While large-scale manufacturers are fulfilling existing export orders without a notable drop-off, there is concern over declining orders moving forward as buyers from importing countries are staying away from Thailand.

And in Cambodia, hundreds of garment workers have been on strike at the Vattanac II Industrial Park demanding the reinstatement of two union officials. The unrest is the latest in a month of fierce demonstrations and an escalating crackdown on protesting workers - and forms a backdrop to the second United Nations Universal Periodical Review (UPR) of the country's human rights record.

Despite a raft of measures introduced last year to protect workers in Bangladesh after a series of factory deaths, human rights "tumbled backwards" and "fell far short of international standards," labour activists have said.

A second piece of research follows up on promises made in the aftermath of the Rana Plaza tragedy nine months ago. It points to slow progress in carrying out plans to compensate victims and conduct follow-up factory inspections.

Successful garment exporters are increasingly taking a more academic approach to sourcing product. Instead of moving to the latest cheap labour country, their strategy is to reduce overhead by increasing worker productivity, training, and capital investment in cutting edge machinery.

Meanwhile, fashion retailer Hennes & Mauritz (H&M) has not ruled out the possibility of expanding its sourcing capacity to Africa as it moves into new major markets in fiscal 2014. The plans were outlined as the retailer revealed an 11% rise in fourth-quarter earnings.

US-based performance apparel, footwear and accessories brand Under Armour has also reiterated its focus on international expansion and says its long-term aim is for global markets to account for more than half of sales.

And nearly four months after Hanesbrands' US$581m acquisition of Maidenform in October last year, the new business has contributed to a healthy rise in both sales and profits.

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