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Gap Inc. to Produce Apparel in Myanmar

The retailer plans to produce apparel at two factories in Myanmar, making it the first to enter the market since the U.S. lifted a ban on imports last year.

WASHINGTON — Gap Inc. plans to produce apparel at two factories in Myanmar, making it the first American retailer of note to enter the market since the U.S. lifted a nine-year ban on imports from the country last year.

This story first appeared in the June 10, 2014 issue of WWD.  Subscribe Today.

The retailer made the announcement at a signing ceremony in Yangon, Myanmar, on Saturday, launching a partnership with the U.S. Agency for International Development to provide assistance and opportunities for women in the country. Gap’s apparel made in Myanmar, previously and often still referred to as Burma, will be available in stores this summer.

“This is a historic moment for Burma and we are committed to working with the U.S. government and local government, alongside local and international nongovernmental organizations, to help create the economic opportunities that the citizens of Burma so richly deserve,” said Wilma Wallace, vice president of global responsibility, business and human rights at Gap. “By entering Burma, we hope to help accelerate economic and social growth in the country, and build on our track record of improving working conditions and building local capacity in garment factories around the world.”

Several major apparel and retail firms were forced to pull out of the country in 2003 when the U.S. imposed a ban on imports after a military junta began repressing human rights.

The U.S. began taking steps to renew economic ties with the country in 2012 after the government made some reforms, including the release of political prisoners, enactment of labor laws permitting the formation of unions and passage of foreign investment laws. In November of that year, the Obama administration said it would allow most imports into the U.S. from Myanmar and the U.S. officially lifted the import ban in August.

Since then, U.S. retailers and brands have been exploring the new opening in the country, which could be a potential fresh apparel-sourcing destination for companies that have been grappling with rising labor costs in China and turmoil in other Asian countries. However, many industry officials have said investment and sourcing will be a slow-moving process because serious concerns remain about workers’ rights and safety. Apparel imports to the U.S. from Myanmar were $5.6 million for the year ending April 30.

A Gap spokeswoman said the company placed the orders for outerwear for its Old Navy and Banana Republic factory stores a few weeks ago with two established South Korean-owned factories in Myanmar employing roughly 4,000 workers.

“In the months leading up to this decision, we researched the opportunities and challenges of doing business in the country,” she said. “As one of the first retailers to begin sourcing garments from Myanmar, we understand the responsibility we have to ensure the vendors we partner with provide a safe, healthy and fair workplace for garment workers.”

She added that Gap had “frank discussions” with multiple stakeholders, and also hired Verité, an independent NGO, to perform assessments of the two factories, as well as structural safety engineers and fire-safety experts to “provide a safe working environment at all of its approved vendor factories.”

The company said it is applying its best practices in the country, including the independent audits, “to ensure internationally recognized human rights and labor standards are upheld in the factories from which the company is sourcing.”

As part of its commitment with USAID, Gap will partner with CARE International in Myanmar to launch its women’s advancement program — Personal Advancement & Career Enhancement, or PACE — in the factories where it contracts by the end of the year. The program provides opportunities for female garment workers by giving them “life skills” education and technical training.