H&M to pay suppliers more as Bangladesh wages rise

Hennes & Mauritz AB has pledged to offset higher workers wages in Bangladesh by raising the prices it pays suppliers for clothing made in the country, according to a letter seen by Bloomberg News.

The Stockholm-based company told its garment providers in Bangladesh that it will "absorb the increase of the wages in our product prices," after the government agreed to raise the minimum monthly wage by 56% to 12,500 taka ($113) from December.

"We support the development of fair and competitive wages in our supply chain and are working toward improving working conditions," the retailer said in the letter.

The Bangladesh pay deal followed weeks of deadly protests as thousands of garment workers took to the streets to demand a higher wage increase than that proposed by the industry group. Manufacturers in the country had feared the salary hike would eat into their profit margins as fashion retailers continue to pay the same prices for orders.

"We support the development of fair and competitive wages in our supply chain and are working toward improving working conditions"

The retailer

"I was very worried about the increased wages," said Mostafiz Uddin, managing director at Denim Expert Ltd., who received the letter from H&M. "It's a great relief for me and it will help me to ensure fair wages for the workers." Uddin said he expected other brands to follow suit.

A spokesperson for H&M confirmed it had communicated changes in its purchasing practices to suppliers in a letter. 

Bangladesh has become the world's second-largest ready-made garment exporter after China, attracting the textile industry with rock-bottom wages. The industry employs about 4 million people and contributed one 10th of gross domestic product in 2022.