A fire broke out at a factory in Bangladesh on November 24, 2012, which manufactured garments for Li & Fung Ltd. and also had connections to Wal-Mart Stores Inc. The incident killed at least 120 workers, after which thousands of Bangladeshi workers launched a protest on the streets on November 26, 2012 .
According to analysts, the incident will not have a significant impact on Li & Fung’s sourcing business', but it is likely to force the retailers and agencies to be extra careful during factory audits, which will add to sourcing costs. The cause of the fire was not immediately clear and the authorities have ordered an investigation.
The incident is a recent blow to Li & Fung, which is the buying agent for a variety of goods, which include toys and clothes for the US and European retailers. The tragedy has also raised concerns over working conditions at the plant, which manufactures goods for the Hong Kong based sourcing giant.
The company has gone on to say that the incident will not have a material impact on its financial performance. They have also added that the total orders placed with Tazreen on behalf of Kids Headquarters, a subsidiary of its US division, amounted to US $111,000 this year.
