Which Factory Made That Shirt? Even the Retailers Don't Know

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In April, a garment factory in Bangladesh collapsed, killing more than a thousand people. The factory had been making apparel for numerous American fashion brands and retailers.

In the wake of the tragedy, Walmart (WMT) -- which had previously sourced clothes from the factory -- touted its commitment to worker safety by releasing an extensive list of factories it had stopped doing business with out of safety concerns. But a ProPublica report released last week found that at least two of those factories were still making clothes sold in Walmart stores.

In one case, the company told ProPublica that it had simply accepted clothing shipments that had already been produced. The other factory was making clothes for Fruit of the Loom that were subsequently sold in Walmart stores, and the company says that there was confusion about which company's standards should apply.

It's not the first time Walmart has found itself having to explain why it was sourcing clothes from unsafe factories. After a fire killed 112 Bangladeshi garment workers in a factory fire last year, reporters found Walmart-brand clothes in the wreckage; the retailer subsequently claimed that it had stopped doing business with the factory, but that one of its suppliers in the region had not complied.

So why is Walmart having so much trouble figuring out where its clothes are coming from?

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In short, it's because supply chains aren't a simple matter of factory-to-store. The Huffington Post's Peter Goodman offers a good look at how lax oversight and a complicated tangle of contractor and subcontractor relationships can lead to companies sourcing goods from suppliers that they might otherwise avoid. Ikea, for instance, purchased furniture made with illegally logged wood, while an Indian firm that Benneton had hired to make its clothes subcontracted the job out to the Bangladeshi factory that collapsed in April.

Further complicating things is that a single item may combine parts from multiple far-flung sources.

"If you're selling sunglasses, you may buy the temples from a different supplier than the screws, and then they're assembled in another factory," points out Brett Rose of United National Consumer Suppliers, a wholesale distributor. "There's a lot of hands in the mix."

That doesn't absolve Walmart and other retailers from responsibility, and it's clear that better oversight of its supplier relationships is necessary to prevent similar failures in the future. It does suggest, however, that consumers who wish to avoid companies that do business with unsafe factories will face an uphill battle.

Socially conscious consumers do have one option: They can boycott companies that refused to sign the Bangladesh Factory Safety Accord, a binding agreement to chip in on safety upgrades for factories in the country. Both Walmart and Gap (GPS) are among those that declined to sign, citing prohibitive costs.

But if you do decide to boycott those brands, just keep in mind that this isn't a foolproof way to avoid wearing clothes made in unsafe factories. If massive multinationals like Ikea and Walmart can bungle their supply-chain management, then anyone can.

Matt Brownell is the consumer and retail reporter for DailyFinance. You can reach him at Matt.Brownell@teamaol.com, and follow him on Twitter at @Brownellorama.

18 Facts About Walmart That Will Blow Your Mind
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Which Factory Made That Shirt? Even the Retailers Don't Know

In fiscal year 2012, Walmart registered approximately $444 billion in sales, which is $20 billion more than Austria's GDP. If Walmart were a country, it would be the 26th largest economy in the world.

Photo: Wikimedia Commons, Andrew Bossi

Walmart has more employees worldwide — 2.2 million — than the population of Houston. The mega-retailer employs 1.4 million people in the U.S. alone.

Source: Walmart Corporate & Financial Fact Sheet

Photo: Flickr, jimmywayne

If Walmart were an army, it would have the second largest military in the world, behind China.

Photo: Wikimedia Commons, BrokenSphere

Walmart is bigger than Home Depot, Kroger, Target, Sears, Costco, and K-Mart combined.

Source: Seeking Alpha

Photo: Flickr, Kevin Dooley

The average family of four spends over $4,000 a year at Walmart.

Source: Otherwords.org

Each week, Walmart serves more than 200 million customers at more than 10,400 stores in 27 countries.

Source: Walmart Corporate & Financial Fact Sheet

One of every four dollars Americans spend on groceries is spent at Walmart.

Source: Otherwords.org

Photo: Flickr, G.e.o.r.g.e

In 2010, CEO Michael Duke's annual salary of $35 million earned him more in an hour than a full-time employee makes in an entire year.

Source: ABC News

In 2009, Walmart sold more bananas than any other item.

Source: Bloomberg

Photo: Flickr, PinkMoose

China's exports to Walmart accounted for 11 percent of the growth of the total U.S. trade deficit with China between 2001 and 2006.

Source: Economic Policy Institute

Photo: Wikimedia Commons, Agnieszka Bojczuk

If Walmart's more than 900 million square feet of retail space were spread out over one place it would take up roughly 34 square miles, which is about 1.5 times the size of Manhattan.

Photo: Wikimedia Commons: Daniel Schwen

Walmart parking lots alone take up an area roughly the size of Tampa, Florida.

Source: Walmart Watch

Photo: Wikimedia Commons: Wt90401

In 2000, Walmart was sued 4,851 times, or about once every 2 hours.

Source: USA Today

Photo: Wikimedia Commons, maveric2003

90 percent of all Americans live within 15 miles of a Walmart.

Source: Business Pundit

The Walton family has given away about 2 percent of its net worth to charity — Bill Gates is giving away 48 percent of his net worth and Warren Buffet 78 percent of his net worth.

Source: Business Pundit

An additional Walmart Supercenter per 100,000 residents increases average BMI (body mass index) by 0.25 units and the obesity rate by 2.4 percent.

Source: SSRN

The most frequent destination typed into GPS device Telenav is Walmart.

Source: Wireless and Mobile News

Photo: Wikimedia Commons, Attitude2000

Roughly 4,700 (about 90 percent) of international stores operate under a banner other than Walmart, including Walmex in Mexico, Asda in the UK, Seiyu in Japan, and Best Price in India.

Source: Walmart Corporate & Financial Fact Sheet

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