In Bangladesh rubble, the prices of profit

Tue May 14, 2013 7:22am EDT
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By Sarah Morris

MADRID (Reuters) - Order dockets found in the rubble of a Dhaka garment factory where over 1,100 workers died show just why it pays foreign stores to buy from Bangladesh - clothes made for as little as a tenth of what they sell for in the West.

Rana Plaza, which collapsed three weeks ago, supplied big names in global retail; documents plucked from its ruins by labor activists and seen by Reuters bring into sharp focus the price of putting shirts on the backs of cost-conscious shoppers.

In one case, polo shirts of a brand sold in London for $46 were offered for sale from Rana Plaza for just $4.45, a typical transformation in an industry where manufacturers across Asia and retailers in Europe and North America are locked in war to get catwalk trends ever faster, and ever cheaper, to consumers.

Found at the site, where rescuers dug out bodies of hundreds of seamstresses and factory hands, were orders from Spanish chain store Mango to Phantom Tac, a supplier based in Rana Plaza, where owners are accused of sacrificing safety to profit.

It is no secret that retail price labels, whether for a $5 T-shirt or a $5,000 suit, reflect manufacturing costs that are a fraction of what the wearer eventually pays. But the mark-ups revealed by the Rana Plaza documents - of 5 to 10 times from factory gate to store window - offer a precise insight into the relationship of one end of a global supply chain to the other.

One order form, a copy of which was shown to Reuters by activists, bore Mango's letterhead logo and was dated January 23 this year. It specifies 12,085 polo shirts for a men's autumn/winter range in five colors - black, off-white, royal blue, burgundy and straw - in six sizes, from XS to XXL, and in 100-percent cotton at a weight of 220 grams per square meter.

The price to Mango: $4.45 each. The chain currently offers similar shirts for sale in Spain for 26 to 30 euros ($34-39) and for 26 to 30 pounds ($40-46) at its branded stores in Britain.

A Bangladeshi garment worker, typically paid less than half the wages of counterparts in China, the world's biggest clothing exporter, would have to spend two or three weeks earnings just to buy one polo shirt at Mango in Madrid. A Spaniard on the minimum wage could afford the same shirt for a day's labor.   Continued...

Rescue workers attempt to find survivors from the rubble of the collapsed Rana Plaza building in Savar, around 30 km (19 miles) outside Dhaka May 4, 2013. REUTERS/Andrew Biraj