Apparel Sourcing Intelligence - Worldwide

Other buyers reveal little about moving out of Bangladesh

Though practically no buyers have publicly admitted reducing orders in Bangladesh, it is generally assumed many will.


“The risk factors have jumped off the charts,” said Julie Hughes, president of the U.S. Association of Importers of Textiles and Apparel (USA-ITA). “This is worse than what anyone had imagined. Almost everybody is going to cut back on what they are sourcing from Bangladesh. Not today, but by a year from now our imports are going to fall. The question is how much.”


But, apart from Disney, no-one has admitted that in public. H&M and Walmart, the top two producers of clothing in Bangladesh, have said they have no plans to leave. So have other major buyers such as Mango, J.C. Penney, Gap, and Sears. “Today’s economy is global, and it is not a question of if a company like H&M should be present in developing countries,” said Anna Eriksson, an H&M spokeswoman. “It is a question of how we do it.” William Fung, chairman of Li & Fung, said his company does not believe it should stop manufacturing in Bangladesh after a structurally unsound building collapsed two months ago and killed more than 1,200 garment workers. “We are so concerned about that,” said Fung, “We are proud of the fact that we are sourcing from these developing countries.”


But, though L&F had donated $10 million to upgrade firefighting equipment in the Bangladeshi factories that make clothing for it, and CEO Bruce Rockowitz repeated that “the firm does not have any plans to move from the country” at the annual shareholders’ meeting in Hong Kong, L&F gave no indication about whether its procurement from Bangladesh would remain at the same level.


Most buyers, if asked about future plans on the record, answered a different question. JC Penney, for example confirmed last week that it is tightening its contracting guidelines in Bangladesh following the building collapse.


It announced a policy that would prohibit contractors from operating out of multiuse buildings. “Standards of this policy are being finalized now and we plan to fully implement [the policy] across the company’s entire supplier base,” spokeswoman Daphne Avila said. “The company has already begun phasing out the use of factories in multiuse buildings in Bangladesh


Penney is also changing its scorecard for rating workplaces. It will now give more weight to structural and electrical inspections on the social compliance checklist to determine a particular factory’s level of risk, Avila said.