The cost of buying cheap...

ash28

grizzly1911 wrote: »

Primark occupied a floor of the collapsed building and workers there were suppliers to the brand.
A spokesman for the company said: "Primark shares 98% of its factories with other well-known retailers. Through the Ethical Trading Initiative, the company will continue to work to improve working conditions, as it has been for several years.
"The company accepts all its responsibilities in this disaster. It is providing assistance in the region, and will take further steps in due course."


http://www.bbc.co.uk/news/uk-22327930


Not sure if Primark occupied the floor or their supplier?

Primark say it's a supplier.....

http://www.primark-ethicaltrading.co.uk/newsfaq/news/bangladesh_update

grizzly1911

ash28 wrote: »

Primark say it's a supplier.....

http://www.primark-ethicaltrading.co.uk/newsfaq/news/bangladesh_update

That's what I thought.

Good to see them not doing a UC.

Feather in their cap, it may not be a big feather at the end of the day but still a feather.

fc123

Primark are having a Very Bad Week. Their logistics supplier has gone down

http://www.drapersonline.com/news/primark-exposed-as-logistics-firm-flounders/5048630.article?blocktitle=Most-commented&contentID=-1

As it's subscriber only I will quote but the comment underneath is from someone in the industry ....Primark run all their costs to the bone, every single one so not just the makers that get squeezed.

Primark exposed as logistics firm flounders

26 April 2013 | By Victoria Gallagher
Stock destined for Primark could be left stranded in factories as the value chain’s key logistics partner Ceva Logistics teeters on the brink of bankruptcy.


Ceva, which is thought to be Primark’s primary logistics provider, had its credit rating downgraded by ratings agency Standard & Poor’s (S&P) this month, from B-minus to SD (selective default) after failing to meet scheduled interest payments.
Competitor ratings agency Moody’s has also downgraded its credit rating for Ceva, classifying the business as “default imminent with little prospect for recovery”.
According to risk management firm Company Watch, Ceva has debts totalling $4.3bn (£2.8bn) and earlier this month Ceva announced EBITDA had dropped 21.8% to €251m (£214m), despite sales rising 4.8% to €7.2bn (£6.1bn). S&P said Ceva could file for bankruptcy if it doesn’t receive consent from note-holders for a refinancing plan.
Nick Hood, business risk analyst at financial research firm Company Watch, said the SD rating implied “there is a serious risk the company will fail”.
He added: “All the indicators are that this company is struggling to survive and is suffering a series of major adverse financial events, which may see it filing for bankruptcy.”
If Ceva does collapse into bankruptcy, retailers could be left in the lurch with stock stuck overseas, and Primark would be particularly vulnerable.
“It would be quite devastating to a lot of its retail clients,” said one supply chain insider. “It is a core logistics company across multiple geographies.”
A logistics source told Drapers: “Primark has used Ceva for years and has been very reluctant to talk to anyone else. If Ceva went bust then Primark would be in a pretty difficult position. If there are question marks around Ceva then they have to make sure they have a contingency.”
It is understood that value chain Peacocks also works with Ceva .

However, he added: “There is always a certain amount of product that is held by the logistics company and there will be a question surrounding who owns this product.”
Sidkin added: “It could be very serious if retailers are operating on very short lead times. All it takes is for the sun to shine and they need to have T-shirts on the shopfloor.”

Primark declined to comment, while Ceva did not respond to requests for comment.



Readers' comments (3)

• Anonymous | 26 April 2013 1:03 pm
  Demanding a cheap cheap supply chain from cradle to grave - will eventually put all in its path in this position.
  Unsuitable or offensive?
• Anonymous | 26 April 2013 2:45 pm
  It does not take a partner at PWC to tell you that the only way Primark can keep their prices so low is by buying in the cheapest places in the world and using a logistics company that needs cash from them very quickly in order to keep themselves afloat. Primark will be ok as they are so big and their suppliers need them to keep going [but at what human cost]

The surprising thing is Primark is owned by the Weston family who also own Selfridges and Fortnums.
http://en.wikipedia.org/wiki/George_G._Weston

However I can say for a fact that the hard nosed way Primark is run does cut across the other fascias....can't say more than that but ethics etc aren't just something that the cheaper end of the market is tricky with.

wotsthat;60974125]How do you reconcile this with the requirements of the bribery act? As I read it it creates an offence for bribes to be paid on your behalf.

I disagree.......
I guess he has to pay to stay in business. However, the next generation are kicking back at this culture (+ many who can have already left to work in the eu) and it will go at some point. I know a Spanish resort that gets payments from shop owners to keep their shops fronts 'safe' and that was 3 years ago.

Point is that the bribes are fixed costs, so same as in Bangladesh, that cash won't find it's way into paying higher wages.

grizzly1911 wrote: »

Primark occupied a floor of the collapsed building and workers there were suppliers to the brand.
A spokesman for the company said: "Primark shares 98% of its factories with other well-known retailers. Through the Ethical Trading Initiative, the company will continue to work to improve working conditions, as it has been for several years.
"The company accepts all its responsibilities in this disaster. It is providing assistance in the region, and will take further steps in due course."


http://www.bbc.co.uk/news/uk-22327930


Not sure if Primark occupied the floor or their supplier?

Supplier who probably only works on Primark dockets.

grizzly1911 wrote: »

That's what I thought.

Good to see them not doing a UC.

Feather in their cap, it may not be a big feather at the end of the day but still a feather.

Primark, much as I hate to be fair to them, are not much worse than the rest of the low to mid market chains on the High St.

Personally I would say Arcadia is worse on many levels not least because of the off shore set up so none of the fascias pay tax on profits, year long internships (with no job at the end...just free labour), mostly 4 hour contracts min wage, the plagiarising and taking of others original work, the fines to factories, the returns to manufacturers if a style doesn't sell......they do throw a few bones back and sponsor a bit of stuff (but they gain far more from that) .

I found out what GPS is (as mentioned in the drpaers comment) http://en.wikipedia.org/wiki/Generalized_System_of_Preferences



On the radio today it seems the general consensus is that it's the consumers fault for ever demanding cheap stuff but I think that's a bit unfair.

Going4TheDream

fc123 wrote: »

Primark, much as I hate to be fair to them, are not much worse than the rest of the low to mid market chains on the High St.

You will find that workers make for several customers in one factory and this goes up all the way to high end brand, often including designer brands. I think the high end are actually worse as their profits are totally scandalous

Taking handbags as an example

"Yes, luxury handbags are made in China," Thomas writes. "Top brands ... that deny outright that their bags are made in China, yet they make their bags in China, not in Italy, not in France, not in the United Kingdom. I visited a factory in Guangdong Province and held the bags in my hands." To see the bags she had to sign a confidentiality agreement that she would not reveal the names. She revealed some to me. She cites a bag which retails here for over £500 and whose unit cost in China is £50, "which is high for bag". Even when the bags really are made in Italy, she says, often it is in factories in which every worker is a Chinese migrant labourer. Despite denials by luxury brand companies, Thomas saw with her own eyes a knitwear factory in Mauritius where one production line was making a department store's own label, another was making Ralph Lauren, and another Calvin Klein, "using the same machines and the same workers," she says.

Ironically last year when Mary Porter was running the project Kinky Knickers where she was sourcing materials and making knickers in the UK using unemployed youngsters and she received a mixed reaction. £10 for a pair of knickers people be-cryed.

Generali

On the radio today it seems the general consensus is that it's the consumers fault for ever demanding cheap stuff but I think that's a bit unfair.

TBH I think it is fair.

If people were prepared to pay more for their clothes they would be made in factories that conform to what we consider to be C21st norms. If everyone wants to buy as cheaply as possibly then standards will necessarily be driven down once you hit a certain price point.

You're in the trade and I bet you couldn't make a pair of baby jeans to retail for the price of a loaf of bread yet in Sept 2005, Mr Tesco sold me a pair of same for 75p. Does that even get you enough time at the minimum wage to sew them and put them on a hanger? Let alone getting them to the store, profit, materials, returns and 'shrinkage' (theft).

We have choices and are responsible for the things that we buy. M&S held out with their 90% UK made or whatever it was for quite a while but people stopped buying there. Almost everyone can afford to pay £3 for a pair of trousers rather than 75p but they choose not to and this is the result.

It's exactly the same as a 99p lasagne having horse meat in it. It's a necessary consequence of current mass retail.

MacMickster

Generali wrote: »

TBH I think it is fair.

If people were prepared to pay more for their clothes they would be made in factories that conform to what we consider to be C21st norms. If everyone wants to buy as cheaply as possibly then standards will necessarily be driven down once you hit a certain price point.


Almost everyone can afford to pay £3 for a pair of trousers rather than 75p but they choose not to and this is the result.

It's exactly the same as a 99p lasagne having horse meat in it. It's a necessary consequence of current mass retail.

This is what I detest about the use of the term "relative poverty". Many in the western world are effectively brainwashed into thinking that they are genuinely living in poverty, and couldn't possibly afford £3 for a pair of baby jeans.

On these boards I frequently read the phrase "... but that's not living. It's just surviving" when it is suggested that tose on benefits should not be able to run a car, have a foreign holiday, visit the pub at least once a week, smoke, have a smartphone etc. Let these people spend a week working 12 hours per day in one of these sweatshops, with their family reliant on the pittance that they earn in order, literally, to survive.

Sadly, the sweatshops in Bangladesh (and many more similar countries across the world) are the ultimate consequence of the global economy and free market, without having worldwide regulation, minimum wages etc. Whilst the consumer can be pretty certain that the 75p jeans were produced in a sweatshop like this, they can't be certain that a £50 pair weren't also made on another line in that same sweatshop.

Graham_Devon

Generali wrote: »

TBH I think it is fair.

If people were prepared to pay more for their clothes they would be made in factories that conform to what we consider to be C21st norms.

TBF, it seems this is not the case. People are paying more for designer stuff and it's still being made in the same factories under the same conditions.

Generali

Graham_Devon wrote: »

TBF, it seems this is not the case. People are paying more for designer stuff and it's still being made in the same factories under the same conditions.

Not if you buy the clothes made in Europe.

M&S offered reasonably priced, reasonably made clothes from British factories and people deserted them for Tesco and the sweatshop option. They did that knowingly and this is a direct consequence of that decision.

I'm trying to be more moderate about it but the simple fact is our cheap clothes are dyed with the blood of dead babies. You can get into sophisticated arguments but everyone has known about conditions in these factories for decades and they put a peg on their nose to hide the stench and buy anyway.

I can't really debate this calmly so I'm leaving the thread for a while but you and I are both culpable for the deaths. Anything else is a lie to appease your conscience.

CLAPTON

Generali wrote: »

Not if you buy the clothes made in Europe.

M&S offered reasonably priced, reasonably made clothes from British factories and people deserted them for Tesco and the sweatshop option. They did that knowingly and this is a direct consequence of that decision.

I'm trying to be more moderate about it but the simple fact is our cheap clothes are dyed with the blood of dead babies. You can get into sophisticated arguments but everyone has known about conditions in these factories for decades and they put a peg on their nose to hide the stench and buy anyway.

I can't really debate this calmly so I'm leaving the thread for a while but you and I are both culpable for the deaths. Anything else is a lie to appease your conscience.

There was an outcry when it was discovered that Nike trainers were being made by children in, I think India (but it was quite a time ago now.)
Nike withdraw from the factories and transferred their business eslewhere.

The BBC did a piece on the consequences 12 months after. The outcomes were quite variable but it was alleged that many of the children had become prostitutes as that was the only other option.

Many people feel strongly about many things; but that doesn't make them right.

As I've said already, the problem is corruption and poor governence in the countries concerned.

We, too, can do our bit but withdrawing our trade may well have unintended consequences even if it makes us feel virtuous.




The BBC

MacMickster

Generali wrote: »

Not if you buy the clothes made in Europe.

M&S offered reasonably priced, reasonably made clothes from British factories and people deserted them for Tesco and the sweatshop option. They did that knowingly and this is a direct consequence of that decision.

I'm trying to be more moderate about it but the simple fact is our cheap clothes are dyed with the blood of dead babies. You can get into sophisticated arguments but everyone has known about conditions in these factories for decades and they put a peg on their nose to hide the stench and buy anyway.

Whilst I fully agree with the sentiment, in reality the situation is far more complex than this.

If we were all to change our ways overnight and begin buying only clothing (and other goods) made in Europe, then we would effectively be passing a death sentence on those who now rely on those sweatshop wages in order to survive.

Businesses within Europe would also, I'm sure,try to take advantage of our new ethical shopping habits by importing goods from outside of the EU in a 95% finished state, allowing them to put a "Made in the EU" label on after stitching on the final buttons. To some in business, the profit motive overrides all ethical considerations.

The government in Bangladesh could never consider imposing strict health and safety legislation and a minimum wage in their country alone, as they would recognise the effect on their own population if the sweatshops simply moved to another country without such regulation.