What Do Armani, Ralph Lauren and Hugo Boss Have in Common? Bangladesh

from The Wall Street Journal..

July 1, 2013

By CHRISTINA PASSARIELLO in London, TRIPTI LAHIRI in New Delhi and SEAN MCLAIN in Dhaka, Bangladesh

Nation Known for Cheap Labor Produces Garments for Designer Labels as Well as Discount Chains

VIDEO

http://on.wsj.com/1b1kYnB

Cheap garment-factory labor doesn’t always equal cheap clothes. The availability of low-cost workers has sent mass-market clothing labels of all stripes–from H&M, Gap, Zara and others—into Bangladesh’s $20 billion garment industry. WSJ’s Christina Passariello reports.

The availability of low-cost workers has sent mass-market clothing labels of all stripes—H&MHM-B.SK -0.17% GapGPS +0.89% Wal-MartWMT +0.99% Zara and others—into Bangladesh’s $20 billion garment industry.

But designer brands including Giorgio Armani, Ralph Lauren RL +0.19% and Hugo Boss BOSS.XE -0.09% also have outsourced manufacturing to Bangladesh, where worker safety has become a huge issue following several fatal accidents. Indeed, high-end labels often use the same factories as their discount peers.

Screen Shot 2013-07-02 at 12.27.45 PM

Primark. £6, or $9.13. It is among a selection of the retail prices on Bangladesh-made T-shirts for sale in London.

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Replay brand. £35, or $53.25. Not all clothing coming out of Bangladesh factories is sold at bargain-basement discount stores.

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G-Star Raw. £60, or $93.25.

(All photos by Christina Passariello/The Wall Street Journal)

Giorgio Armani last year received shipment of 21,600 pounds of T-shirts and underwear made in a factory in the port city of Chittagong, according to the shipping records. A nearby factory supplied women’s pants to Michael Kors.

…….

Factory owners in Bangladesh say their profit margins tend to be the same, regardless of the customer. Mr. Ahmed says Fakir’s profit margin doesn’t top 2.5%. “Customers are always pushing down costs,” he says.

For the seamstress making the T-shirt, wages depend on her skill, and have nothing to do with whether she is sewing a designer or discount label.

A top sewing machine operator may get $100 a month, not counting overtime, while a worker one grade below may earn around $80, says Mr. Fernandez—about enough to buy one of the high-end designer Ts.

Link to the entire article and video:  http://online.wsj.com/article/SB10001424127887323998604578567522527553976.html?KEYWORDS=Christina+Passariello

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