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Many buyers cancelled visiting Dhaka: Unexpected travel- cost and hassle for RMG marketing

In this March several global apparel retailers have canceled trips to Bangladesh, which analysts say could result in shift of orders to other competitors. According to a report of BGMEA over the last two months, representatives from retailers such as GAP, American Eagle, Pinkie, Okidi and Promote suspended scheduled visits.The visit suspension has created fear among local manufacturers of taking away orders from Bangladesh and shifting to competitors like Vietnam.The $24bn industry, which accounts for more than 80% of the country’s total export earnings and globally the second largest exporters after China, is the mainstay of the Bangladesh economy.A delegation from GAP was scheduled to come to Bangladesh in last month.They had to cancel the tour as the validity of VISA expired in the long wait for the political calmness in Bangladesh. So it is a chilling message for the industry and the economy as well. Like GAP, some other leading buyers have postponed their trips.

However as always, Bangladeshi RMG makers are showing their resilience once again. In a perspective when many buyers were not feeling safe to get in Bangladesh, RMG makers themselves traveling all around the country to meet the buyers to make new deals. Many buyers are banking in places like Hong Kong, Thailand, India, Dubai etc. Buying meetings and discussions are taking place those places and a management and marketing teams from Bangladeshi factory are travelling to those countries. A knit composite factory producing knitwear products informed that in last two months they were an additional travel cost around 10 million BDT for meeting buyers. The unexpected travels are hindering there regular operations as well. Executives from different buying and liaison offices also had to travel to surrounding countries for meeting their counter parts as their buyers are not getting into town. It is very clear that this phenomenon is affecting Bangladesh’s hotel and tourism industry also.

A leading commercial real estate services and investment firm CBRE reported that Germany is the most sought after retail market in the world with 40 per cent of retailers surveyed planning to open a store there in 2015. Germany is the top target market for 47 per cent of Europe, Middle East and Africa (EMEA) based retailers, while 50 per cent of the Americas and Asia Pacific (APAC) based retailers are targeting South Korea. Among the American retailers, 43 per cent are looking to Japan, China and Hong Kong for expansion. So Retailers from across the globe are trying to boost up themselves day by day by expanding store, closing unprofitable store, joining up with partnership etc. As a regular section here are ten activities of those retailers to be highlighted for our readers.

Primark may recompense rest of Tk 30cr to Rana Plaza victims

British retailer Primark is likely to disburse over Tk 30 crore to the Rana Plaza victims by March to complete disbursement of Tk 113 crore in compensation it committed. The company earlier disbursed around Tk 83 crore to the victims of the deadliest factory disaster in the country. Primark through its liaison office in Dhaka, ABE Investments Plc, filed an application to the labour ministry seeking approval for the receipt and disbursement of its pledged fund amounting to Tk 113.43 crore.

Labour secretary MikailShipar told that the British company had sought approval for disbursement of Tk 113.43 crore with a retrospective effect for approval of Tk 83 crore it disbursed earlier. Earlier, Primark announced a programme to provide appropriate long-term compensation and support services for 580 workers, or their dependants, of its supplier, New Wave Bottoms, equivalent to $11million or around Tk 88 crore. New Wave Bottoms was one of the five garment factories housed in Rana Plaza at Savar, which was collapsed in April 2013 killing around 1,134 people, mostly workers.

Primark paid $2 million or around Tk 16 crore as short-term financial assistance to 3,639 workers of the five garment factories and their families, equivalent to nine months’ salary. The retailer also paid $1 million or around Tk 8 crore to Rana Plaza Donors Trust Fund, led by the International LabourOrganisation. Victims of all garment factories are supposed to get compensation from the Donors Trust Fund. Roy Ramesh Chandra, a member of Rana Plaza Donors Trust Fund, said Primark started its payment in March 2014 and it was supposed to complete it by March 2015 before the second anniversary of the disaster that took place on April 24 2013. A number of global buyers and the Bangladesh government paid around $21 million to the donors’ fund, which still remains short of downsized target of $30 million of ILO. As some global buyers have not showed any interest to give money to the donors’ fund ILO cut the original target of $40 million to $30 million.

H&M teams up with Belgian show jumpers Nicola and Olivier Philippaerts

Fast fashion retailer H&M has signed a long-term partnership with 21-year old show jumpers and twin brothers Nicola and Olivier Philippaerts, who are currently ranked 55th and 43rd in the world. H&M has had a partnership with show jumper MalinBaryard-Johnsson since 1996 and show jumper PederFredricson since 2003. Now, the company continues its dedication to equestrian sport with a new partnership. ‘To be a part of a team with such experienced riders as Malin and Peder is a great opportunity for us. This is also a possibility for us to reach out even more to our fans, as they can follow us through the Facebook page H&M We Love Horses,’ says Olivier Philippaerts.

1Petra Leijonaf Buren, sponsoring manager for show jumping at H&M said, ‘We are confident that Nicola and Olivier will be great ambassadors for H&M both in and off the saddle. They are future stars but down to earth at the same time, they are full of horsemanship, hard workers, humble and interested in fashion. Olivier and Nicola will be a perfect addition to our H&M team’.

Marks & Spencer closes five store in Shanghai

British retailer Marks & Spencer announced that it plans to shutter five stores in the Shanghai region of China, although it will stick to a commitment to expand into the country’s other large cities. M&S also said that Bruce Findlay, its regional director for Asia, was quitting the firm after less than two years in the role to take up a position with another retailer.

The company entered China in 2008 with a store in Shanghai. It now has 15 in the greater Shanghai region, but it has struggled to make a major impact in a country that it said remained one of its priority international markets, along with India, Russia and the Middle East. The group is evaluating potential local partners to aid its expansion in China, a path taken by other British retailers such as supermarket group Tesco and home improvements firm Kingfisher. However, five of its supporting stores in the greater Shanghai region will close by August. Some 60 jobs will be affected. M&S also plans to reduce the size of its Shanghai head office.

Gap Q4 earnings rise 10%

Gap Inc., owner of the Gap, Banana Republic, Old Navy, Athleta and other brands, announced fourth quarter and full fiscal year financial results. For the quarter ending Jan. 31, net sales were up 3 percent (5 percent when adjusted for foreign currency fluctuations) to $4.71 billion, in line with estimates, compared with $4.58 billion for the fourth quarter of fiscal year 2013. The company’s fourth quarter comparable sales rose by 2 percent, driven primarily by an 11 percent increase in same-store sales at Old Navy. Total online sales were $792 million for the fourth quarter of fiscal year 2014 compared with $698 million in the fourth quarter last year.

gapAnother press release of Gap Inc said it has been honored for the ninth consecutive year by the Ethisphere Institute in recognition of fostering a culture of ethics and transparency at every level of the company. According to a Gap, it is one of only fifteen to have been honoured every year since the list’s inception, underscoring Gap’s commitment to leading ethical business standards and practices.

Inditex donates angora sweaters to Syrian refugees

Zara parent company Inditex announced last month that it banned the sale of all angora wool in its stores worldwide, and to further drive home its pledge, the company donated the remaining stock of its angora product to people in need.The retail value of the donated clothing is nearly $900,000. Having worked with Life for Relief and Development in 2007 in Bangladesh to distribute Polo Ralph Lauren fox and raccoon pieces after the company agreed to stop selling fur, PETA asked the nonprofit where the greatest need is now before deciding on Lebanon for the Inditex donations, a PETA spokesman said.

In a November 2013 investigation into the rabbit angora wool industry, PETA reported routine animal cruelty and urged Inditex and other retailers with ties to those facilities to stop using angora. Calvin Klein, Tommy Hilfiger and Stella McCartney are among the 70-plus brands and stores that have banned angora products as a result of that investigation.

C&A Supports a better world for mothers and children

C&A, one of the leading European fashion chain, has entered into an international partnership with the charity organisation Save the Children for the next three years, giving million of mothers support in humanitarian crises.

According to statistics more than 250 million children under the age of five are living in regions where armed conflicts reign. The partnership with Save the Children is based upon the excellent experience during collaborations in crisis, such as taifunHaiyan in the Philippines and the endemo-epidemic in Sierra Leone. Besides Eruope, Brazil, China and Mexico, the core markets of C&A and C&A Foundation, the charity organisation is also active in supplier countries of C&A.In addition to the financial suppoort, C&A intends to invite collaborators and customers to participate.C&A disposes of more than 2000 sales points in 24 countries and employs over 60000 persons. C&A Europe is belonging to COFRA Holding.

Retail giant Wal-Mart is boosting pay for its U.S. employees

Wal-Mart Stores Inc. will boost pay for its U.S. employees to at least USD 10 an hour by 2016, well above the minimum wage, a sign of a tightening labour market and rising competition for lower paid workers, reports the Wall Street Journal. The action might be a turning point for what have been stubbornly stagnant wages since the recession ended almost six years ago, and it would amplify gains for low wage workers across the nation if other companies will follow the nation’s largest private employer. The new rate is up 38 % than the current federal minimum hourly wage of USD 7.25.

Wal-Mart’s plan affects about 500000 employees at Wal-Mart and Sam’s Club stores, or about a third of the company’s 1.4 million U.S. workers. Minimum pay will be increased to USD 9 an hour in April, before climbing to USD 10 an hour by February 2016. For its quarter ended January 31, 2015, Wal-Mart reported earnings of USD 4.97 billion, up from USD 4.43 billion in 2013. Revenue rose 1.4 % to USD 131.6 billion as customer traffic grew for the first time in more than two years, helped by lower gasoline prices.

Target Q4 and 2014 results beat Wall Street

Target Corp. reported its fourth-quarter financial results as $1.50 in earnings per share (EPS) and $21.8 billion in revenue. That came over the top of Thomson Reuters consensus estimates of $1.46 in EPS and $21.63 billion in revenue. In the same quarter of the previous year, the retailer posted $0.90 in EPS and $21.52 billion in revenue.The company gave guidance for the fiscal first quarter. Target expects EPS to be in a range of $0.95 to $1.05, compared to the consensus estimate for EPS of $1.04.Target paid dividends of $330 million in fourth quarter, a 21.6% increase from $272 million in 2013. The company did not repurchase any shares of its common stock through open market transactions during fourth quarter or full-year 2014. At the end of the fourth quarter, Target had cash and cash equivalents totaling $2.21 billion

Uniqlo cut hours at China factories after accusations of poor labor conditions

Fast Retailing Co., Asia’s biggest clothing chain, said two of its China-based suppliers are reducing working hours following a report that criticized the factories making its Uniqlo garments for labor abuses.Dongguan Tomwell Garment Co. has cut working hours of factory workers. Pacific Textiles Ltd. gave them one holiday per week and will introduce a system to reduce hours while keeping up production volumes next month, Yamaguchi, Japan-based Fast Retailing said in a statement.

3The efforts follow investigations taken after the Jan. 11 report from Students & Scholars against Misbehavior, a Hong Kong-based non-governmental organization. Other steps include the ending of a system of fines, air quality and temperature checks, and training on labor rights for workers who aren’t represented by unions, Fast Retailing said, adding it’s still in a dialogue with SACOM on other issues it found contradicted with the NGO’s report.Fast Retailing rose 0.5 percent to 43,705 yen at the close of Tokyo trading, while the benchmark Topix gained 1.4 percent.

American Eagle and Aeropostale dump their logos as they look for edge

By staying on top of trends, quickly turning around inventories and offering new styles, prints and new bohemian looks – all with little visible branding – American Eagle and Aeropostale may have found the path to recovery, analysts say.The decisions early on by American Eagle Outfitters Inc and AeropostaleInc to abandon the logo-covered clothing that made them popular in the 1990s and 2000s could also give them an edge over bigger rival Abercrombie & Fitch Co.

aeropostaleAmerican Eagle’s sales rose 3 percent in the holiday quarter, the first increase in ssteven quarters, while Aeropostale said in January that it might make a profit after two years of losses.American Eagle’s inventory turn, which measures the number of times inventory is sold and replaced, rose to 7.63 in 2014 from 6.93 in 2013, according to Stifel, Nicolaus& Co. For Aeropostale, Stifel estimates turns were down to 9.7 from 10.3 last year, but were quicker than Abercrombie’s 2.89 times, which was down from 3.22 in 2013.Abercrombie’s results show little evidence the company has been able to deal with the challenges in the sector, analysts said.

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