May 4, 2013

After tragedy, L.L. Bean to take closer look at overseas factories

With more than 500 dead in Bangladesh, the Freeport firm and other retailers re-examine their international suppliers.

By Jessica Hall
Staff Writer

In response to the factory collapse in Bangladesh that killed more than 500 people, L.L. Bean, which sells clothes made by contractors around the world, says it is stepping up its monitoring and visits of overseas production sites.

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L.L. Bean, which sells clothes made by contractors around the world, says it is stepping up its monitoring and visits of overseas production sites in the wake of the Bangladesh tragedy.

Associated Press File Photo

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Kevin Hudson, store manager at Ten Thousand Villages on Exchange Street in Portland, sits near merchandise on display from Bangladesh along with a sign stating their support for family and friends of the victims of the factory collapse. Photographed on Thursday, May 2, 2013. The store is encouraging Fair Trade Retail and offering their support to Bangladesh in light of the recent factory collapse.

Shawn Patrick Ouellette / Staff Photographer

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The Freeport-based company is one of many retailers and manufacturers that are re-examining the standards and practices of their overseas suppliers in the wake of last week's factory collapse. Six months ago, a fire at a different garment factory in Bangladesh killed more than 100 people.

In March, Walt Disney Co. ordered an end to the production of its branded merchandise in Bangladesh and four other countries, while companies such as Wal-Mart Inc., J.C. Penney, Gap Inc. and the Children's Place recently have looked at ways to improve working conditions in Bangladesh.

Such changes can be expensive for a company, and it's not clear that all companies -- or consumers -- are willing to absorb the increased labor costs.

"It probably costs cents per garment, not 10 times the price, to make it in a safe, fair way," said Jan Hammond, the Jesse Philips Professor of Manufacturing at Harvard Business School. "I would like to think people would take the economic hit and do the right thing. It's an ethically easy decision for companies to make," she said, but even cents per garment can make a difference in the highly competitive clothing industry.

Many retailers have moved their manufacturing to developing countries like Bangladesh as labor costs in China have risen in recent years.

Bangladesh is now the world's second-largest apparel exporter, after China, with about 4,000 garment factories paying workers less than $40 a month. That compares with 40,000 garment factories in China, paying salaries close to $200 a month, according to a report by National Public Radio.

In addition to Bangladesh, L.L. Bean clothing and jackets are made in Thailand, Malaysia, El Salvador, Vietnam, Sri Lanka and China.

The company's manufacturing monitors are in Bangladesh this week, L.L. Bean spokeswoman Carolyn Beem said.

"Following the tragedies in Bangladesh, most of the industry is thinking and rethinking sourcing practices. L.L. Bean has redoubled our monitoring efforts and factory visits," Beem said in a written statement. "We do have one vendor in Bangladesh, however it is in a different part of the country from where the recent building collapse occurred, (and) is within an industrial zone and operates in a modern facility."

L.L. Bean has a code of conduct for best practices that includes health and safety, and labor standards, the company says. All of the factories where it has production facilities are required to adopt that code of conduct, the company said.

To monitor manufacturing operations, Beem said, L.L. Bean has employees in the countries of production and others who travel from Freeport.

The company also works with third-party monitors who ensure that there is no subcontracting, she said.

Monitoring and enforcing codes of conduct in foreign countries can be difficult and costly for companies, but they are critical steps to protect lives and brand names, said Hammond.

"Monitoring is not trivial. You have to have a lot of people on the ground who really understand what's going on in a facility and what's going to a subcontractor," she said. "It's not impossible. It may be costly, but not as costly as losing hundreds of lives and the brand implications. These events have been quite damaging to brands over the years."

Nike Inc., for example, faced a backlash in the 1990s over child labor in the production of its sneakers. Pressure from the public forced the company to change its practices.

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