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Bangladesh Factory Fire Puts Brands At Risk



Global clothing brands involved in Bangladesh’s troubled garment industry responded in different ways to the building collapse that killed more than 600 people. Some quickly acknowledged their links to the tragedy and promised compensation. Others denied they authorized work at factories in the building even when their labels were found in the rubble.

There have been three deadly disasters in Bangladesh’s $20 billion garment industry in the past six months. A factory fire killed 112 workers in November and a January blaze killed seven.

Over the past decade, major players in the fashion industry have flocked to Bangladesh, where a minimum wage of about $38 a month has helped boost profits in a global business worth $1 trillion a year. Clothing and textiles now make up 80% of Bangladesh’s exports and employ several million people.

For brands doing business in Bangladesh, there are two paths to take.

First – the high road. Admit presence in the factory. Retailers and clothing brands can protect their reputations by visibly and genuinely working to overhaul safety in Bangladesh’s garment factories.

Only a few companies, including Britain’s Primark and Canada’s Loblaw Inc., which owns the Joe Fresh clothing line, have acknowledged production at Rana Plaza and promised compensation.

The alternative is to distance your brand from Bangladesh production altogether. Brands downplaying involvement in Bangladesh’s factory safety problems may be counting on the short memories of Western consumers, who tend to focus on price and may not even check where a piece of clothing has been made.

This is not without risk. In the months to come it’s likely there will be continued coverage of the overhaul of the garment industry in Bangladesh. As that unfolds brands will be exposed. They will then be forced to come clean. And the repercussion?

Well, it can take decades to build a brand reputation. Heck, when Steve Jobs returned to Apple in 1996, eleven years after being fired, the Apple brand (and company) was in shambles. Fast forward to today where Apple is the most revered brand on the planet.

Just as it can take only a few months to take down a brand as has happened at JCPenney.

U.S. consumers talk a big game. They say they prefer Made in the U.S.A., they want more ‘green’ production and they want safety for factory workers. But in the end they vote with their wallets. And they generally gravitate to cheaper prices. Today Bangladesh is a source of cheap product. There’s a pretty good chance those days are nearing an  end.

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