Bangladesh: Tesco pulls out, Uniqlo invests

One country, two retailers, two different approaches: While British retail giant Tesco chose to stop using 15 factories of concern in Bangladesh in the past 12 months, Japanese fashion house Fast Retailing announced yesterday that it will open

two Grameen Uniqlo stores in the Bangladeshi capital of Dhaka on 5th July that sell clothes “made by locals, for locals”. Profits will be reinvested into growing the business and the goal of a nationwide chain of Grameen Uniqlo stores.

Though it is commendable that Tesco kept its promise of conducting structural surveys of all the factories it sources from, it is not clear what the alternative to using these factories is. In case of the recent pull-out from Liberty Fashions in Dhaka, Tesco simply seems to have severed all ties: "Our concerns about the structure of this building are so serious that we decided our only option was to stop taking clothes from this site with immediate effect. …We immediately made the owners aware of our findings, and tried to find an alternative to ceasing production of Tesco products on this site. We are disappointed that this was not possible," announced Tesco in a statement on Saturday.

Building safety of Liberty Fashions yet to be established

The owner of Liberty Fashions, Mozammel Huq, denies the claims and assures that the factory meets the required building codes. "I fully followed the building code, so the question does not arise that it is an unsafe building. …The building is almost new - one phase I built only five years ago and the other one eight years ago," said Huq in a phone conversation with Reuters on Saturday.

To be fair to both sides, a new inspection by a neutral source seems to be in order. The Bangladesh University of Engineering and Technology (BUET) has been asked to inspect the building again and Huq has already agreed to close his factory if it was found to be unsafe and to move to a safe site.

Though the situation is still far from ideal with workers continuing to work in a potentially unsafe building until the issue is solved and their financial future threatened by the pull-out of a big client, the dialogue between buyer and supplier is a big step ahead, that too before a disaster has happened.

Fast Retailing plans Grameen Uniqlo store chain in Bangladesh

Japanese fashion retailer Fast Retailing goes a step further with its planned Grameen Uniqlo chain of stores. The initiative is part of Fast Retailing's long-term commitment in Bangladesh that wants to address the country’s issues with poverty, hygiene, the environment and educational and gender inequality.

The two new Grameen Uniqlo stores in Dhaka located at 234/2 New Elephant Road and 41/8 Block C Banasree will feature clothes that are tailored to the specific needs of Bangladeshi customers. Reasonable prices are one requirement, which is why the 32 items on offer for men and ten for women are all priced between 2.50 and 15.50 dollars (195 and 1200 Bangladeshi taka).

In addition, the collection for Bangladesh is made using locally sourced materials and is produced not far from the stores. Last but not least, in keeping with Uniqlo’s signature "beauty in hyperpracticality" style, the collection focuses on clothes made of soft, stretchable and fast drying synthetic materials such as polyester and polyurethane that are more practical in the rainy season than cotton clothes for example.

"We are pleased to announce today our next step in our long-term commitment to the rapidly developing nation of Bangladesh. We reinvest any profits to grow the business, and help to address challenges related to poverty, hygiene and education. Our aim is to nurture independence and self-sufficiency, and to contribute toward raising the standard of living in Bangladesh," commented Fast Retailing chairman, president & CEO Tadashi Yanai.

Though every retailer and brand needs to find the sourcing and production solution that works best for its business model, products, customers and employees, it is important to keep a long-term solution in mind that also helps the stakeholders at the sourcing end. And as current examples show, there are many options and different models available for international retailers and brands.

Image: Woman sewing / Friends of UNFPA