April 23, 2024

Abercrombie & Fitch Agrees to Bangladesh Factory Safety Plan

The only other American signatory is PVH Corporation, the parent company of Calvin Klein and Tommy Hilfiger.

Under the legally enforceable plan, retailers and apparel companies have committed to having rigorous, independent factory inspections, and to helping underwrite any fire safety and building repairs needed to correct violations.

“We are committed to Bangladesh and support industrywide efforts to improve safety standards,” said Kim Harr, director of sustainability at Abercrombie, which had $4.5 billion in revenue last year. “We believe this is the right thing to do to bring about sustainable, effective change.”

This week, a flood of European retailers joined the plan, including HM, Carrefour, Mango, Primark, Marks Spencer and Inditex, the parent of Zara. Momentum to join the plan grew after a factory building in Bangladesh collapsed on April 24, killing more than 1,100 workers.

With so many European companies signing on, pressures have increased on American retailers to join, with much of that pressure focused on Gap, the world’s third-largest apparel company, which is often viewed as an industry leader on social responsibility. The plan’s supporters predicted that numerous other American retailers would follow suit if Gap signed on.

Labor advocates and officials in Washington said there were intense internal discussions within Gap about whether to back the plan. In recent days, Gap has been the most vocal critic of the plan, saying it feared that joining would subject it to undue liability.

Gap sent a letter to employees at its headquarters on Wednesday, saying, “We take our commitment to improving working conditions in Bangladesh very seriously.” The letter said Gap had hired a fire inspector to examine the 78 factories it uses in Bangladesh and had promised up to $22 million in loans for factories to make safety improvements.

IndustriALL Global Union, a federation of unions from 140 countries that has negotiated with numerous retailers, urging them to join the plan, announced late Wednesday that a total of 31 companies had signed on.

Article source: http://www.nytimes.com/2013/05/16/business/global/abercrombie-fitch-agrees-to-bangladesh-factory-safety-plan.html?partner=rss&emc=rss

DealBook: VF Corporation to Buy Timberland

The VF Corporation said on Monday that it would acquire Timberland in a $2 billion deal that would add to the apparel company’s extensive collection of brands like the North Face, Jansport, Nautica and Vans.

The deal, at $43 a share, represents a more than 40 percent premium to Timberland’s closing price on Friday.

With the addition of Timberland, VF’s sports group will account for 50 percent of the company’s overall sales. Timberland is expected to notch revenue of $1.6 billion this year, with the majority coming from outside the United States. VF estimates that it can bolster sales at Timberland by some 10 percent a year, in part by growing the international business and women’s footwear.

“Timberland is proud of its rich heritage, its track record of success and its reputation as a responsible and environmentally conscious global citizen, all of which will be preserved and enhanced by becoming part of the VF family of brands,” Jeffrey Swartz, chief executive of Timberland, said in a statement. “VF is known for its ability to acquire and grow authentic outdoor brands, while protecting a brand’s unique culture and DNA.”

VF expects the deal will increase its earnings per share by 25 cents in 2011 and 75 cents in 2012. The acquisition, which has been approved by the boards of both companies, is expected to close in the third quarter.

“This will be a winning combination, leveraging VF’s international and direct-to-consumer platforms to drive growth in the Timberland and Smartwool brands globally,” Eric Wiseman, chief executive of VF, said in a statement.

Article source: http://feeds.nytimes.com/click.phdo?i=4a1ba2848aee3c9f5ae39d3d817a1d52