Investigating Business Essay

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Primark

Hired by the late Garfield Weston, the head of Associated British Foods, in the late 1960’s Arthur Ryan was given £50,000 to set up a discount clothing store and by June 1969 the first Penneys store had opened in Mary Street, Dublin. Surprisingly the store was so popular that within one year of being open 4 more stores were added to the chain. With Primark being a tertiary company selling clothes to the general public at the budget end of the market they must have a place where the clothing is manufactured which happened to be over in India.

I believe that Primark is a semi-global company considering they have opened (as of 12th August 2013) 6 stores in Portugal, 35 in Spain, 4 in The Netherlands & 160 in The United Kingdom and also 2 in Austria, 1 in Belgium, 10 in Germany and 38in Ireland where said stores are branded Penneys as “The name could not travel to Britain at the American firm JC Penney had the rights to the name” and thus “Primark was born” With an overall total of 256 stores in these eight countries it’s no wonder Primark/Penneys is bordering a global company.

Although a global phenomenon Primark has had many issues. In 2006 the decided to join the Ethical Trading Company that focuses on bringing together businesses, trade unions and NGOs to work on labour rights issues in chains supplying their company. 2 years later and the UK charity War on Want launched a report fashion victims 2 showing that terms and conditions in Bangladeshi factories that’s supplied Primark had not been improved.

A month later it was claimed that ETI had forced one of Primark’s suppliers to remove its branding from the stores. This was followed with a whirlwind of investigations by the BBC and The Observer into employment practices. The investigations alleged use of illegal immigrant labourers that were being paid less than the UK’s legal minimum wage.

2 years, 5 months and 8 days later the BBC Trust’s Editorial Standards Committee published findings in a Panorama special ‘Primark: On The Rack’ which happened to be broadcast 4 years earlier. The program was an undercover investigation into the poor working conditions in the Indian factories supplying Primark. Although they had subsequently ceased to do business with the suppliers the ESC concluded the footage was more likely than not to have been fabricated.

One large challenge Primark had to face was that in 2013 the Rana Plaza , and eight-story commercial building, collapsed in Savar near Dhaka. Over 1,000 people were killed and 3,000 were injured. Housing many separate garment factories, several shops and a bank all employing around 5,000 people. Primark then offered compensation and emergency aid to the victims of the collapse.

Quote from http://www.boards.ie/vbulletin/showthread.php?t=2056618730

Article from http://www.independent.co.uk/news/business/news/primark-drops-three-indian-suppliers-for-using-child-workers-848564.html
Tuesday 17th June 2008
“The low-cost British fashion retailer Primark has dropped three of its Indian suppliers for sub-contracting embroidery work to companies which use child labour. All orders with the firms, based in the southern state of Tamil Nadu, have been cancelled and all clothing supplied by them has been removed from Primark's 170 UK branches.
Associated British Foods, which owns Primark, said: "We take this lapse in standards very seriously indeed. Under no circumstances would Primark ever knowingly permit such activities, whether directly through its suppliers or through third-party sub-contractors."
The infringement of the company's ethical sourcing code only came to light because of a BBC documentary to be screened on Monday. The Panorama Special is the second television programme this month to look at sweatshops used by the chain. Channel 4's The Devil Wears Primark – allegedly a hard-hitting exposé of cheap clothing outlets – was pulled from the schedules two weeks ago.
Primark stressed that it
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