March 1, 2017 6:54 am JST

Uniqlo operator publicizes nearly 150 suppliers

Japanese casual clothier yields to industry norm amid human-rights concerns

A factory in Bangladesh making clothing for Uniqlo.

TOKYO -- Fast Retailing on Tuesday disclosed the 146 garment factories that supply its Uniqlo clothing chain, following the lead of Western peers in responding to growing human-rights concerns.

The Japanese casual clothing retailer released the names and addresses of suppliers in seven countries including Bangladesh and Indonesia. The list includes contractors with continued business relations, which account for more than 80% of order value.

The contractor list is viewable to anyone via Fast Retailing's website. The company plans to also identify the suppliers of its low-cost GU brand by the end of the year.

Fast Retailing, which has maintained a competitive edge by providing durable and highly functional clothing, had hesitated to unveil the information because the factories have know-how the company would prefer to keep private -- such as methods of quality control and productivity improvement, as well as advanced technology. Making supplier names public comes with the risk of letting other companies know Fast Retailing's "key assets," said Group Senior Vice President Yukihiro Nitta.

But the disastrous collapse of a Bangladeshi factory in 2013 and other developments have fueled concerns about garment factory workers. Human-rights advocates and consumer groups have intensified demands that big apparel companies take responsibility for ensuring decent working conditions for suppliers. In this way, third parties can monitor working conditions.

Many Western companies have responded to the shifting tide toward ethical consumption. U.S. retailer Gap and Britain's Marks and Spencer disclosed supplier factories last year. H&M Hennes & Mauritz of Sweden and America's Nike have publicized theirs as well.

Human-rights advocates are increasingly influencing consumers' purchasing behavior, particularly in the West. Refusing to share information about contractors could erode a company's corporate value. 

"With more consumers around the world aware of work conditions and other issues, apparel companies are showing transparency to improve their brand image," said Minoru Fukuda, a principal at Roland Berger's Tokyo office.

Fast Retailing last year conducted more than 500 investigations into working conditions at supplier factories. But critics have argued that reports mentioning no specific names lack credibility, and the Uniqlo operator has been considered passive in information disclosure. "Fast Retailing had lagged behind other global brands," said Kazuko Ito, secretary general of nongovernmental organization Human Rights Now.

Midtier Japanese apparel companies looking to go global are also joining the trend. Okayama Prefecture-based Stripe International sees disclosure as a "must," and it plans to "publicize the information by 2020," when it hopes to fully advance into Western markets, according to President Yasuharu Ishikawa. Tokyo-based Adastria will also consider identifying suppliers, according to an official.

(Nikkei)

FAST RETAILING CO., LTD.

Japan

Market(Ticker): TKS(9983)
Sector:
Industry:
Retail Trade
Apparel/Footwear Retail
Market cap(USD): 48,226.2M
Shares: 106.07M

Adastria Co., Ltd.

Japan

Market(Ticker): TKS(2685)
Sector:
Industry:
Retail Trade
Apparel/Footwear Retail
Market cap(USD): 990.24M
Shares: 48.8M

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