Large U.S. retailers are mostly rejecting a plan to financially support safety improvements in Bangladesh factories. Walmart (NYSE:WMT) said on Tuesday (May 14) that it won't accept the agreement that has been signed by several large European chains, but will increase its own inspections. Gap (NYSE:GPS) also said it wouldn't sign on unless it was protected from lawsuits. Other chains met Tuesday in a conference call sponsored by the National Retail Federation, but the group made no announcement ahead of a Wednesday deadline for signing the pact.
The most notable feature of that agreement is that signers pledge financial support for open inspections and for mandatory repairs. On Tuesday, Marks & Spencer, Carrefour, Loblaw and Benetton agreed to sign the five-year Accord on Fire and Building Safety in Bangladesh. H&M, Tesco, Primark and U.S.-based PVH (NYSE:PVH)—which owns the Calvin Klein, Tommy Hilfiger and Van Heusen brands—have already signed onto the deal.
The five-year agreement was originally developed in 2012, but was revised and extended after the collapse in April of an illegally constructed garment factory building that killed more than 1,100 people.
Walmart gave no specific reason for not signing the accord, but instead of paying into the fund, the world's largest retailer said it will make public the results of its inspections of all 279 supplier factories in Bangladesh. The chain has already posted a list of 245 factories that it won't use because they were found to have serious violations of its standards.
Walmart also said in a statement that it will beef up inspection standards and require remediation, and "expects that the costs of appropriate remediation and ongoing safety investments to be appropriately reflected in its costs of goods purchased."
Gap said on Tuesday it was "six sentences" away from signing the accord, but made no announcement. The chain said it wanted changes in the agreement to clarify that retailers who contributed to the fund would not be legally liable for future problems at the Bangladesh factories. Target (NYSE:TGT), Sears (NASDAQ:SHLD) and JCPenney (NYSE:JCP) also have not signed the agreement.
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