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Sep 4, 2012
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H&M urges pay boost for Bangladeshi garment workers

By
Reuters
Published
Sep 4, 2012

Swedish fashion group H&M , sensitive to criticism about poor pay and conditions at its clothing suppliers in Asia, on Tuesday urged Bangladesh to lift its minimum wage and introduce annual pay reviews for garment workers.



Karl-Johan Persson meets Prime Minister of Bangladesh



"We want to see a stable market in which people are treated with respect, and where the workers are properly compensated by their employers," chief executive Karl-Johan Persson said during a visit to Bangladesh.

Bangladeshi factories, where some wages are as low as $37 a month, make clothes for H&M and other major companies such as Tesco, Wal-Mart, JC Penney, Marks & Spencer, Kohl's and Carrefour.

But the killing of a labour activist and publicity over unsanitary and unsafe working conditions in the country's 4,500 garment factories is worrying retailers anxious to protect their brands.

Analysts believe that labour unrest and delayed shipping schedules may erode the advantage to retailers of low prices.

Spanish rival Inditex has outperformed H&M in recent quarters, helped by its broader range of brands and by the fact it sources a smaller proportion of goods from Asia.

Earlier this year, a panel of judges in Cambodia, where H&M also sources garments, urged clothes factory owners to pay more and called on international fashion brands to do more to improve working conditions.

H&M's Persson told a news conference he had met Bangladesh Prime Minister Sheikh Hasina and urged the government to lift the minimum wage and introduce annual wage reviews.

Persson, who said H&M intended to grow its business in Bangladesh by 10-15 percent annually, said it was in the country's interests to develop an advanced and mature textile industry.

"If a proper review system is created and enforced, these revisions will help address the basic needs of the workers and bring greater stability to the market," he added.

H&M is the largest single buyer of Bangladeshi garments and imports about $1.5 billion of readymade clothes from the country, trade officials said.

Garments made up $19 billion of Bangladesh's total exports of $24 billion in the year ended in June, 2012, according to government data.

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