Fast Retailing vows steps against labour abuses at China plants

[TOKYO] Fast Retailing Co., Asia's biggest clothing seller, said it would improve working conditions at two factories operated by suppliers in China, including asking one to establish a union.

The Japanese seller of Uniqlo brand casual wear also asked factory operators Dongguan Tomwell Garment and Pacific Textiles, to take steps including eliminating fines against workers, increasing holidays, requiring protective clothing and monitoring air quality, according to a statement from Fast Retailing today.

The effort to eliminate labour abuses emerged from the company's investigation after being alerted to poor working conditions by a Jan 11 report from Students & Scholars Against Misbehaviour, a Hong Kong-based advocacy group.

Japanese billionaire Tadashi Yanai built Fast Retailing into the region's biggest apparel company partly by relying on lower-cost Chinese factories to produce clothes using simple designs and innovative materials.

"Fast Retailing has urged swift action against the factories on the issues identified in the SACOM report, and we will cooperate fully with them to ensure that improvements are made," Yukihiro Nitta, Fast Retailing group executive officer, said in the statement. "Together with third parties, including auditors and NGOs, we will check progress within one month."

Yanai is betting on sales in China and elsewhere outside Japan to fuel growth as domestic demand is damped by stagnant economic growth and a declining population.

The brand's international sales leaped 47 per cent in the quarter ended in November, with greater-than-expected gains from stores in South Korea, China, Hong Kong and Taiwan. Overall sales rose 23 per cent to 479.5 billion yen (S$5.33 billion) in the period.

Dongguan Tomwell makes clothes in Guangdong province as a member of the Fast Retailing Group, while Pacific Textiles supplies textiles to garment factories, according to the statement.

BLOOMBERG