Global fashion brands say to raise purchase prices for Bangladesh … – Reuters

NEW DELHI, Nov 9 () – Global fashion retailers including H&M (HMb.ST) and Gap (GPS.N) are committed to raising prices Bangladesh-made clothing to help factories there offset higher workers' wages, a U.S.-based association representing more than 1,000 brands said.
Bangladesh is the world's biggest garments exporter after China. This week, after deadly protests between police and factory workers, the government mandated an almost 60% to the minimum monthly wage to 12,500 taka ($113) from December, the first increase in five years.
Factory owners had said the wage hike, which comes ahead of a January general election, would eat into their profit margins by increasing costs 5-6%. Labour accounts 10-13% of total manufacturing costs, industry estimates show.
Asked if they would purchase prices by the 5-6% that costs will rise, Stephen Lamar, chief executive of the American Apparel & Footwear Association (AAFA), told : "Absolutely".
"As we and our members have reiterated several times now, we are committed to responsible purchasing practices to support the wage increases," Lamar said in an email.
Employees work between polythene sheets, as a safety measure to reduce the spread of coronavirus disease (COVID-19), at The Civil Engineering Limited garment factory in Dhaka, August 17, 2021. /Mohammad Ponir Hossain/File photo Acquire Licensing Rights
"We also renew our pleas the adoption of an annual minimum wage review mechanism so that Bangladeshi workers are not disadvantaged by changing macroeconomic conditions."
Low wages have helped Bangladesh build its garment industry, which employs about 4 million people. Readymade garments are a mainstay of the economy, accounting for almost 16% of GDP.
Even after the increase in minimum wage, which some workers said was too little, Bangladesh lags other regional garment manufacturing hubs such as Vietnam, where the average monthly wage is $275, and Cambodia, where it is $250, data from the International Labour Organization shows.
Last month, several members of the AAFA including Abercrombie & Fitch (ANF.N) and Lululemon (LULU.O), told Bangladesh Prime Minister Sheikh Hasina they wanted workers wages to rise, and to take into account inflation, which is currently at 9%. Lamar also wrote to Hasina in July.
Retailers in the United States and Europe are the main buyers of Bangladesh-made clothes. Like most consumer goods retailers, fashion companies are grappling with high inventories and a slowing global economy, where shoppers in key markets are buying less as they feel the pinch.
($1 = 110.0000 taka)
Reporting by Krishna N. Das; Additional reporting by Ruma Paul in Dhaka; editing by Miral Fahmy
Our Standards: The Thomson Reuters Trust Principles.
Thomson Reuters
As the breaking news editor for South Asia, Krishna leads a team of reporters in the region covering everything from political and general news to economic and financial news. He also closely tracks India’s health industry and all things Bangladesh. He was a member of teams that won the Society of Publishers in Asia awards in 2017 and 2018 for Reuters coverage of the Bangladesh Bank heist and the Rohingya refugee crisis. He served as Malaysia bureau chief in 2019/20 before returning home. Krishna earlier led India’s political and general news team.
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