Wal-Mart Stores, Inc. (WMT), The Gap Inc. (GPS), PVH Corp (PVH): The High Price of Cheap Clothing

British Vogue reports that retailer Primark, a subsidiary of Associated British Foods plc (LON:ABF), has promised compensation to the victims employed by its supplier, which was housed in the Bangladesh building that collapsed on April 24. The company has partnered with a local NGO to provide for the immediate needs of those affected by the tragedy. Parent company ABF claims on its website that it has conducted over 1,700 audits of 235 of its top suppliers, which account for over 87% of total business. On Monday, Primark followed H&M‘s footsteps and signed on to participate in the Bangladesh safety accord.

Several groups that are following this issue find the safety accord a preferable way of creating safety standards that are legally binding and require retailers and manufacturers to not place orders from factories that don’t comply with safety requirements.

Conclusion

For garment manufacturers, monitoring the supply chain can be daunting because of the many intermediaries involved in the production of clothing. But industry experts say this is critical if safety measures are to be put in place and strictly enforced. Labor groups question the individual effort of companies because initiatives are not enforceable and transparency of results is not guaranteed. The Bangladesh safety accord is considered the better alternative because its legally enforceable and has independent broad measures that can be applied to the industry as a whole.

With online petitions, media reports and store protests bringing light to this issue, consumers will vote with their wallets on whether they consider worker safety important. Investors should take note if sales for these retailers drop and their stock prices are affected by these tragedies. When companies see the marketplace responding, they’ll need to give worker safety the attention it deserves.

The article The High Price of Cheap Clothing originally appeared on Fool.com.

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