
Financial
Amazon Sells Clothes From Factories Other Retailers Blacklist
https://www.wsj.com/articles/amazon-sells-clothes-from-factories-other-retailers-shun-as-dangerous-11571845003?mod=hp_lead_pos6

According to a Wall Street Journal investigation, the site today offers a steady stream of clothing from dozens of Bangladeshi factories that most leading retailers have said are too dangerous to allow into their supply chains.
A yellow gingham toddler top embroidered with flowers was among those clothes, listed on Amazon for $4.99 by a New York City retailer. The Journal traced the top to a factory in Chittagong, Bangladesh, that has no fire alarms and where doors are of a type managers can lock and keep workers in. A laborer at the factory, 18-year-old Nasreen Begum, said she spends 12-hour days there stitching shirts with 300 others. “You’re trapped inside until the time you complete the orders,” she said.
Path to Market
Despite coming from a factory that has been blacklisted by most large retailers, this top made its way to being listed on Amazon.
Despite coming from a factory that has been blacklisted by most large retailers, this top made its way to being listed on Amazon.
Manufactured at the Riverside Apparels factory in Chittagong, Bangladesh
Shipped to Trendset Originals Importer & Wholesaler in Manhattan, N.Y.
Sold to a shop in Brooklyn, N.Y.—Cookies— which then listed it as the Amazon seller Chillipop
The Journal found other apparel on Amazon made in Bangladeshi factories whose owners have refused to fix safety problems identified by two safety-monitoring groups, such as crumbling buildings, broken alarms, and missing sprinklers and fire barriers. U.S. retailers such as
Walmart Inc.,
Target Corp.
,
Wholesale Corp. and
Gap Inc.
have agreed to honor bans imposed by those two groups, to have their supply chains inspected and to disclose to the groups the factories that supply them.
The Journal found clothing including pants, sweaters, clerical robes, fishnet body stockings and other items, that originate from blacklisted factories and end up on Amazon.
Amazon has become a major player in apparel, a force with which other retailers must compete in a market where customers often seek the lowest price. It may have overtaken Walmart last year as America’s No. 1 clothing seller. Amazon dominates the rapidly growing online-retail market.
Here, as throughout Amazon’s business, the giant retailer runs its platform without many of the constraints that big U.S. companies apply to their products and stores, sometimes in ways that can put customers and workers in danger.
That is particularly true for Amazon’s third-party marketplace, made up of millions of individual sellers. Many are anonymous and aren’t subject to some of the oversight Amazon applies to its own brands and to items it sells directly.
The Journal in August revealed that thousands of products listed on Amazon are deemed unsafe by federal agencies, are deceptively labeled or are banned by regulators—items that many retailers’ policies bar. They included items such as unsafe children’s toys and recalled motorcycle helmets. Amazon took down some of those listings after the Journal’s reporting. Several members of Congress called on Amazon to better police its site.
An Amazon spokeswoman said at the time that “safety is a top priority” and that the company uses automated tools to weed out suspicious sellers.
Asked about its practices in clothing, the company removed some listings the Journal identified from banned Bangladeshi factories, including the yellow top, and said it was reviewing the others. A spokesman said Amazon inspects factories that supply its own brands to ensure they are in line with international safety standards similar to those of the safety-monitoring groups. The Journal didn’t find Amazon-owned brands made in banned factories.
Of the banned factories the Journal found with apparel on Amazon, some of the clothing items they produced were for sale by Amazon directly. Most—more than two-thirds—were being sold by third-party sellers using Amazon’s marketplace platform.
The spokesman said Amazon doesn’t inspect factories making clothing that it buys from wholesalers or that comes from third-party sellers. Instead, it expects those wholesalers and sellers to adhere to the same safety standards.
Amazon’s agreement with third-party sellers doesn’t explicitly say they must meet those standards.
“If we become aware that a product is from a factory that may not meet our supply chain standards,” the spokesman said, “we will remove the product from our store.”
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The company’s control of its site is under scrutiny by some Congress members who are calling for more regulation of the company. Other U.S. technology giants that have lost control of their platforms—or decline to control them—face similar pressures. Amazon consumer chief Jeff Wilke, at the WSJ Tech Live conference Tuesday, said Amazon might need to spend billions of dollars to police products on its site to preserve customer trust.
Ethical lines aren’t clear-cut in the global garment-supply chain, which remains a murky network in which clothes pass from factories through traders around the world. Even signatories to one of the safety groups have offered items that come from unsafe factories.
Some garments the Journal found on Amazon were also listed on Walmart.com, mostly by third parties on the online marketplace Walmart developed after Amazon’s third-party market grew rapidly. The Journal found garments from one banned factory listed online by Target.
Walmart spokeswoman Marilee McInnis said the company was looking into the items for sale directly by Walmart and talking to the companies that supplied them. Target removed its listing after the Journal pointed it out, and declined to comment.
Meanwhile, Sears and Kmart, whose previous parent company was a member of a safety-monitoring group, have resumed importing from banned factories, shipping records show. A new postbankruptcy ownership structure under financier
Edward Lampert
didn’t continue as a member of monitoring groups. A spokesman for Sears and Kmart didn’t respond to questions about the company’s sourcing policies.
Blacklisted pants
Clothing sellers formed two safety groups in Bangladesh after the 2013 Rana Plaza collapse. The factory complex, which manufactured clothing for several Western brands, killed more than 1,100 when it fell and injured many more, some of whom were stuck under the rubble for days. One worker the Journal interviewed a year after the accident survived by sawing off her arm. Together, the groups have blacklisted more than 300 factories.
Photo:
Associated Press
One group, Amsterdam-based Accord on Fire and Building Safety in Bangladesh, has mostly European members. The other, Dhaka-based Alliance for Bangladesh Worker Safety, attracted mainly U.S. members, such as Walmart, Target, Costco, Gap and
Nordstrom Inc.
Alliance members were expected to abide by Accord’s blacklist.
Alliance transferred operations this year to a group with less stringent rules, Dhaka-based Nirapon, which neither issues a blacklist nor publicizes the safety performance of factories members use. MD Yazdani, communications manager for Nirapon, said it facilitates third-party inspections for factories that make clothes for members and that Nirapon sends out its own inspectors to review a portion of those.
As of 2017, 11 retailers accounted for more than 50% of U.S. clothing sales,
reported last year. Of those, three didn’t join the safety-monitoring groups—T.J. Maxx parent
TJX Companies Inc.,
Ross Stores Inc.
and Amazon. TJX said it orders very little clothing from Bangladesh. Ross Stores didn’t respond to requests for comment.
To trace how Amazon lists clothes from factories the monitoring groups banned, the Journal used records from a global-shipping-records database, information on Amazon.com, factory-inspection reports from the safety-monitoring groups and interviews with dozens of people in the New York and Bangladesh garment industries.
The Journal reviewed shipping records from Panjiva, a division of
S&P Global Inc.
that collects them, for 122 banned factories that appeared to be still in operation. Since being banned, 67 of those had sold to wholesalers whose wares appear on Amazon, records show.
The Journal was able to link products on Amazon to codes or product descriptions in shipments from 51 of those factories. Of those 51 factories, 16 shipped items that were sold by Amazon directly and 35 shipped items that were listed on Amazon.com by third parties.

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Get The Simple Traffic Blueprint Now!Of the 122 factories, 33 had sold to wholesalers whose wares were on Walmart.com. The Journal linked specific listings on Walmart.com to codes or product descriptions of 22 factories. Items from seven of those factories were sold directly by Walmart; the rest were sold by third parties on Walmart’s marketplace, which numbers about 22,000 sellers.
Many listings on Amazon.com and Walmart.com don’t show product codes, nor do many bills of lading in shipping records, making them difficult to trace. And the Journal could count records only for shipments sent directly to the U.S., not those traveling first through other countries.
Photo:
Ashiq Alam for The Wall Street Journal
Among clothes the Journal found on Amazon from banned factories were pants from Klarion Designs Ltd., a Chittagong maker that Accord blacklisted in 2017 after the group waited two years for the owner to remove locking doors and fix damaged walls. The Journal in August found 11 styles of Klarion-made pants on Amazon.com for $18.95 to $44.95, some sold directly by Amazon and others by third-party sellers.
One shipment of women’s cargo pants left Chittagong on the ship CMA CGM Elbe, shipping records show, landing on Aug. 14, 2018, at Oakland, Calif., for wholesaler Amtai International Ltd. Amtai sold the pants to Amazon, which then listed them directly under the brand name White Sierra, according to shipping records and Amazon listings.
Amtai has imported 15 tons of pants from Klarion since the Accord ban. The records don’t show how many tons were later listed online. Klarion’s owners didn’t respond to requests for comment. Amtai Vice President Larry Tsui declined to comment. Amazon took down the listings after being contacted by the Journal.
Accord and Alliance documentation says they inspected many of Bangladesh’s thousands of garment factories, usually giving them a year or more to address problems before a ban. Of the 1,794 inspected factories detailed on Accord’s online database, its records show it has declared about 8% ineligible.
Companies joining Alliance and Accord agreed to legally binding conditions. They included the requirement that the companies abandon factories that didn’t meet the groups’ standards and agree to enforcement by an independent arbitrator.
Under Accord’s terms, two unions brought two fashion companies to arbitration and scored settlements in 2017 and 2018, one of them valued at about $2.3 million; the companies’ names weren’t disclosed. The unions claimed the companies weren’t doing enough to ensure factory safety.
Fashion foray
Amazon began advertising itself as a place to buy clothing in 2012, pitching its Amazon Fashion clothing site. By 2017, its share of U.S. clothing sales was 7.9%, just behind No. 1 Walmart, estimated Morgan Stanley analysts, up from less than 1% in 2006. They predicted last year that Amazon was on track to pass Walmart as No. 1.
Much clothing on Amazon comes from Bangladesh, among the world’s largest clothing exporters. Amazon publicizes little information about its supply chain, offers few details about how it enforces safety and doesn’t require third-party sellers to disclose the factories where products come from. Many listings don’t identify the country where the products were made, so it typically isn’t possible for consumers to tell if sellers are buying wares from Bangladesh.
Many of Amazon’s most popular listings for clothes are marketed under little-known brand names, according to an analysis of the best-selling women’s clothes on the site by data firm Marketplace Pulse. That best-selling list changes often: An average of 3.5 new brands, many of them obscure, appear on the list every day. The list of best-sellers recently has included such anonymous-sounding brands as XMYIFOR, from a seller based in China, Marketplace Pulse said. XMYIFOR in an email confirmed it is a China-based brand.