Bangladesh Factory Collapse: Loblaws Vows To Audit Structural Integrity Of Factories It Uses

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JOE FRESH LOBLAWS BANGLADESH FACTORY COLLAPSE
Onlookers gather during the funeral of garment workers killed in the garment factory collapse at a graveyard in Dhaka on May 1, 2013. Tens of thousands of Bangladeshis joined May Day protests Wednesday to demand the execution of textile bosses over the collapse of a factory complex, as rescuers warned the final toll could be more than 500. (MUNIR UZ ZAMAN/AFP/Getty Images) | Getty Images

TORONTO - Loblaw Companies Ltd. says it will include the structural integrity of buildings in audits of suppliers in the wake of the collapse of a building in Bangladesh that housed one of the companies suppliers.

More than 400 people died when the illegally constructed, eight-storey building collapsed last week.

One of the factories in the building produced some items for Loblaw's Joe Fresh clothing line.

"We must do a better job to enforce the safety of workers producing our products in Bangladesh and around the world," said Joe Mimran, who founded the clothing brand Joe Fresh.

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Loblaw says its standards were designed to ensure that products are manufactured in a socially responsible way, but they did not address the issue of building construction or integrity.

The company says it will now have its own staff on the ground to help with the inspections of its supplier companies.

Mimran said owners of other factories that manufacture Joe Fresh clothing have already started to provide the company with architectural plans and building permits.

Galen Weston, executive chairman of Loblaw, also called for other clothing retailers who had garments made in the factory to come forward.

"There are many other retailers involved here and the way that we're going to make lasting change in countries like Bangladesh, and the industry as a whole, is to act as an industry," he said.

Loblaw has also set up a relief fund to help victims and families of those killed in the disaster now and in the future. Weston did not provide details when questioned on how the money will be used.

One shareholder asked Weston whether the company would establish a website to keep the public updated with the efforts being made in Bangladesh. He said while those plans haven't been made, it's being considered.

"We will look at options for opportunities to keep the public, consumer and shareholder up to date on what it is we are doing."

On Wednesday, Loblaw reported a 40 per cent increase in first-quarter profits and raised its dividend just over nine per cent.

Canada's largest supermarket operator said it earned $171 million or 61 cents per share, up from $122 million or 43 cents in the year-earlier period. Revenue rose to $7.2 billion from $6.94 billion.

The company also said it expects to file a preliminary prospectus for its real estate investment trust in late May and complete an initial public offering in early to mid-July.

Loblaw operates 22 different banners, including Independent, Zehrs, Superstore, Wholesale Club, Value-mart, No Frills, Maxi, Loblaws and Provigo.

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