Factory Collapse Spurs Concern Only If $6 Bikinis Stay

In the wake of disasters in Bangladesh garment factories that have claimed hundreds of lives in recent months, shoppers in the West have shown growing concern about worker safety in developing countries. As long as it doesn’t mean an end to bargains.

Collapsed building in Dhaka, Bangladesh | Source: Associated Press

LONDON, United Kingdom — In the wake of disasters in Bangladesh garment factories that have claimed hundreds of lives in recent months, shoppers in the West have shown growing concern about worker safety in developing countries. As long as it doesn’t mean an end to bargains.

“It bothers me, but a lot of retailers are getting their clothes from these places and I can’t see how I can change anything,” 21-year-old university student Elizabeth McNail said, clutching a brown paper bag from clothier Primark the day after a building collapse in Savar, Bangladesh, killed at least 362 people. “They definitely need to improve, but I’ll still shop here. It’s so cheap.”

Both of Primark’s stores on Oxford Street in central London heaved with crowds sorting through clothing under neon signs heralding “Amazing Fashion Amazing Prices” last week. The floors were littered with crumpled t-shirts, jeans, and sundresses, while shoppers waited in queues 50-deep to pay for summer wear like a 1.50-pound ($2.32) fluorescent sun visor and 7-pound cut-off denim shorts.

Primark, a unit of Associated British Foods Plc, is one of at least five retailers whose products were made in the eight- story building that collapsed. Loblaw Cos.’ brand Joe Fresh, U.K. budget retailer Matalan Ltd., plus-size womenswear seller Bonmarche Ltd. and Spanish department store El Corte Ingles have also said they had suppliers in the building.

A 2012 report by consultants McKinsey & Co. said purchasing chiefs at American and European clothiers considered Bangladesh the “next hot spot” due to its low costs. Over four-fifths plan to cut China sourcing, where wages are rising, because of declining profit margins. The Bangladesh Garment Manufacturers and Exporters Association says the country is the world’s second-largest apparel exporter, after China. Textiles account for about 80 percent of Bangladesh’s exports.

The shift to Bangladesh has created an $18 billion manufacturing industry, yet one that is marred by factories with poor electrical wiring, an insufficient number of exits and little firefighting equipment. More than 1,000 Bangladesh garment workers have died in fires and other disasters since 2005, according to the International Labor Rights Forum, an advocacy group in Washington. A November fire at a factory making clothes for companies including Wal-Mart Stores Inc. killed 112 people.

Clothing companies have come under increasing pressure to lower costs as the rise of fast fashion at cut-throat prices has trained consumers to expect $5 T-shirts and $6 bikinis. The cost of clothing in Britain has dropped 20 percent since 2005, according to the U.K.’s Office for National Statistics, while food is up 43 percent.

Even small price increases in the name of better worker safety would be enough to turn away some shoppers, like American exchange student Shannon Atwell. The 21-year-old spent 12 pounds on a dress, sunglasses and a fake-leather handbag at Primark last week. “I didn’t buy a 13-pound dress because I thought it was too much,” she said. “If prices went up I wouldn’t buy from here.”

As attention turns to Bangladesh, Primark is among the companies with the most to lose. The retailer has more than doubled sales in the last five years to 3.5 billion pounds, far outpacing rivals on the British high street like Hennes & Mauritz AB and billionaire Philip Green’s Topshop. That’s been driven by a focus on trendy, regularly updated fashions and low prices on garments imported from Bangladesh and other Asian countries.

Primark says it hired a supplier called Simple Approach to make some of its garments. Simple Approach, in turn, contracted with a company named New Wave, which had a workshop in the collapsed building.

Since the factory collapse, Primark has vowed to push for structural surveys of buildings as part of supplier audits. Spokesman Chris Barrie said the retailer has sent senior staff to Bangladesh to work with a non-governmental organization to get food and other assistance to the local community. He declined to comment further.

Primark has many pages on its website dedicated to what it calls its ethical trading stance. The company outlines its code of conduct, supplier auditing process, and its own performance. The site includes a short film about how the company provides health and nutritional education for female garment makers in Bangladesh.

The program “has encouraged me to learn more and work harder,” Habiba, a 24-year-old worker whose surname was not provided, said in a case study on the site.

The Ethical Trading Initiative, a consortium of apparel makers, trade unions and non-governmental organizations that establishes codes of conduct for companies, has spoken out against the “horrific incident” in Savar and called for better safety. The ETI declined to comment specifically on Primark’s sourcing practices.

“This terrible tragedy highlights the urgency of putting a stop to the race to the bottom in supplying cheap means of production to international brands,” said Jyrki Raina, general secretary of the Industrial Global Union, which says it represents 5 million garment workers worldwide, including some at the collapsed Bangladeshi factory.

The challenge for Primark is balancing activist and government demands with customer desires for cheap clothes. Those two forces collided April 27 when a group called War on Want held a protest outside Primark’s Oxford Street store, according to the BBC.

While Primark will likely see little impact from the disaster, despite the global headlines, “it’s something they have to monitor more carefully because while it won’t hurt trade, it may impact consumer perception of how well they look after their suppliers,” said Honor Westnedge, an analyst at retail industry trackers Verdict Research.

Perceptions do matter. Just ask Nike Inc., the world’s largest sporting-goods maker, which improved Asian factory conditions in the late 1990s after its stock sank amid widespread reproach from advocacy groups, politicians, and shareholder activists. Critics said workers were hurt by low wages, forced overtime, and the use of toxic chemicals in poorly ventilated facilities.

To avoid similar censure, Primark should put more time and effort into monitoring its suppliers, according to Planet Retail analyst Isabel Cavill.

“They could probably afford to invest in their factories, but it’s a tough market and it’s very difficult to up prices,” Cavill said. “The consumer may need to start getting used to higher prices.”

By: Sarah Shannon in London, with assistance from Lindsey Rupp and Renee Dudley in New York. Editors: Matthew Boyle, David Rocks

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  1. No comments on this article? Yeah, let us silence our conscience. Let’s talk fashion but not dirty stuff, turn away and pretend it is not happening attitude is the strategy we use as a survival mechanism. Bottom line is all the shareholders care, at the business schools we are constantly reminded that the primary role of the managers is the shareholder wealth maximization. And the business people are the ones that rule the world, they give us jobs, right? So that we can go and spent our meager wages at Primark et al. When nothing else can fit in our brainwashed heads, the only option for us is head to the shops and stimulate our senses with pointless purchases. Hail the Western economy that is built is still runs on the slavery.

    Violeta from United Kingdom
  2. International retailers can do more to advocate safer standards at textile factories that manufacture their wares, in Bangladesh and elsewhere. Customers can do their part by putting a little pressure on their favorite brands, though that would require placing as much value on the cost of a life as you might on the cost of a T-shirt.

    Anonymous from Dhaka, Dhaka, Bangladesh
  3. Too much focus on profit and no focus on people: what do you expect – that’s capitalism. Perhaps as consumers we should consider spending our wages on locally designed and produced goods: it would save transport carbon and rejuvenate our decimated home rag trade.

    Grey from Fleet, Hampshire, United Kingdom
  4. What this article fails to mention is that its not only “bargains” that drive the constant human rights abuses going on in India, China, Taiwan, etc. Its all clothing companies! There is not a single LVMH company that doesn’t produce almost all its merchandise in these countries, I promise. Anything that has a made in Italy or France label in it has most likely been “assembled” in these countries but certainly not produced there.. That is so incredibly ridiculous. If we’re paying 6$ for a bikini I understand there won’t be money left for fair wages but if I’m paying 350$ and thats the case? No way.

    I love fashion. Always have and always will but I wish there were more stores/options in most price ranges (except for the ridiculously cheap which I understand) that believed in providing workers fair wages, schooling, better quality of life… I know its possible but it will only come about once enough people complain and a movement really begins.

    If you want to get informed here are two wonderful books:

    Deluxe: How Luxury Lost Its Luster by Dana Thomas

    No Logo by Naomi Klein

    Mel from Quebec, QC, Canada