H&M’s charitable arm is launching what it describes as a “long-term project” designed to support women garment workers in Bangladesh, beginning with addressing their immediate needs in the wake of the coronavirus outbreak, the Swedish fast-fashion giant announced Friday.
The initiative will begin with a largesse of 12 million Swedish kronor ($1.3 million) to the nonprofits CARE, Save the Children and WaterAid to provide emergency relief to roughly 76,000 young women, their families and community members in and around the Bangladeshi capital of Dhaka, as well as communicate COVID-19 hygiene practices to 1 million people.
“We will directly support women and their families with for example cash assistance for food, medication and other necessities, provide COVID-19 awareness raising and testing, hygiene materials and handwashing facilities,” Carola Tembe, program manager of H&M Foundation, said in a statement. “We hope to see more donors show their support in different ways.”
How much relief this initial sum will provide is debatable. Bangladesh has been dealt a particularly crushing blow by the ongoing pandemic as Western brands and retailers scurried to unilaterally cancel orders, implement retroactive discounts or extend payment terms beyond reasonable time frames in an effort to salvage what remains of their imploding bottom lines.
Force majeure loopholes have left Bangladeshi factories losing more than $3.1 billion in contracts, the equivalent of 982 million garments, according to the Bangladesh Garment Manufacturers and Exporters Association (BGMEA), the nation’s largest trade group of factory owners.
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The country, which is the world’s second-largest exporter of clothing after China and relies on apparel for 84 percent of its export revenue, expects an “irrecoverable loss” of $5 billion this fiscal year. Roughly one-quarter of its 4 million-strong textile-industry workforce are unemployed as factories, facing slumping demand and concerns about the spreading contagion, operate at less than full capacity.
The Bangladeshi government’s recently expanded 1-trillion-taka ($11 billion) stimulus package, the International Monetary Fund’s approved $732 million in emergency aid and the European Union’s pledge of 113 million euros ($127 million) to 1 million garment workers have been slow to trickle down to the people who need financial relief the most.
But H&M Foundation says it is taking a holistic approach—one that will extend beyond COVID-19—by also supporting families where gender-based violence has increased because of the pandemic. In addition, it plans to center its support on protecting and educating disadvantaged children, and equipping women garment workers for a “future where work is defined by automation and digitalization.”
“Together with different partners we will make up-skilling, re-skilling, digital literacy efforts and entrepreneurship available to women garment workers with the aim to increase their future employability,” Tembe said.
H&M, which also owns the Cos, Weekday and & Other Stories brands, is Bangladesh’s largest apparel buyer, purchasing some $3.5 billion worth of garments in 2019, according to local suppliers. Barring one hiccup, since resolved, it was among the first companies to commit to pay for completed and in-progress merchandise on time and in full after freezing production in the early days of the outbreak.
The retailer has not been immune to the crisis, which forced it to close nearly all its stores worldwide during widespread lockdowns. In late June, H&M reported a rocky second quarter as pre-tax losses soared to 6.5 billion Swedish kronor ($704 million) against a 5.9 billion Swedish kronor ($644 million) profit in the same period last year. Sales tumbled to 28.6 billion Swedish kronor ($3.1 billion) from 57.4 billion Swedish kronor ($6.2 billion) a year ago.
Online has been H&M’s saving grace, with sales ticking up 32 percent. “The positive development of online sales has continued since we began reopening our stores,” Helena Helmersson, H&M’s chief executive, said in a statement. “As the stores have reopened, our total sales have gradually begun to recover.”