Executives in the apparel sector and agents in RMG trade in the US believe that the cost of clothing will rise in the coming months as a sequel to the Rana Plaza collapse. After the Rana Plaza incident, operational costs of garment factories in most exporting countries mainly Bangladesh, has risen.The reasons include: spending extra money in improving safety standards and meeting worker’s demand for higher wages.
The overall rise in clothing cost will equally hurt manufacturers and consumers. It is likely to curtail profits margin of garment companies, as they may not be able to raise retail prices, fearing the shoppers' backlash.
Leading brands and retailers in Europe, the US and Canada, who buy garments from Bangladesh, have taken separate but identical multi-million dollar projects to improve safety standards and workers' rights in local garment factories over the next five years.
In the wake of tragedies in the RMG sector, global retailers including Wal-Mart, GAP and Abercrombie & Fitch have pledged various moves to improve workers' safety. Bangladesh is the second largest garment exporter of the world after China, controlling about 20 per cent of the total US apparel import with a dramatic share increase in the recent years.