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H&M Plans Bangladesh Expansion Amid Concerns About Conditions

Hennes and Mauritz (H&M) is seeking to increase its sourcing from Bangladesh, according to Head of Sustainability Helen Helmersson as quoted by Dow Jones Newswire. The world’s second largest clothing retailer has expressed its wishes to the Bangladeshi government and clothing producers.

At the same time, ongoing strikes in the country have made planning production difficult, as protests can cause long delays. H&M’s fast fashion model relies heavily on advance planning for manufacture of staple garment pieces, but also needs suppliers that are able to rapidly implement design specifics.

Helmersson said that a stable Bangladeshi market would have ripple effects beyond benefitting the company. It would also benefit suppliers and workers, and improve the economy overall.

Roughly 25% of H&M’s products are made in Bangladesh, and the company has extensive power to pressure suppliers to improve work conditions and establish better labor relations. The company also has the ability to support worker demands for higher wages. The company plans to roll out a pilot program with democratic labor committees that can negotiate directly with factory owners.

Bangladeshi apparel exports are expected to almost double by 2015 and triple in the next ten years, according to a recent study by consulting and research firm McKinsey. The country is capturing growth from China, which is suffering from capacity constraints tied to rising labor costs. However, poor factory conditions in Bangladesh and sustainability problems surrounding water use and pollution have hindered competitiveness.

H&M Chief Executive Karl-Johan Persson said, “We are big buyers in Bangladesh and we want to take greater responsibility for working conditions there. And we reward the suppliers who take the greater social responsibility with more business, larger orders and longer contracts.”

With that in mind, H&M and several other large apparel companies signed a pledge last year to clean up apparel production in Bangladesh.