1. Primark in storm over conditions at UK
supplier
Fashion giant acts after investigation
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Dan McDougall
The Observer, Sunday 11 January 2009
Britain's high street fashion giant Primark was at the centre of a storm last night over allegations
that illegal immigrants paid just over half the minimum wage had been employed to make
fashionable knitwear for one of the firm's bestselling ranges.
Primark announced yesterday that it had launched an inquiry after an investigation by the
Observer and the BBC revealed that Manchester-based garment firm TNS Knitwear may have
breached key employment and immigration laws. Breaches of the legislation could lead to fines
of up to £10,000 for each illegal worker and potential prosecution for tax evasion and
employment law abuses.
Primark also said it had handed material uncovered by the investigation to the UK Border
Agency.
The workers, caught by an undercover journalist on a hidden camera, were allegedly being paid
£3 an hour - just over half the minimum wage of £5.73 - for 12-hour days, seven days a week.
Many of the garments made by the Pakistanis, Afghans and Indians over the past five months
had ended up two miles away in one of the retail giant's largest and most profitable stores in
Manchester's bustling Market Street.
The allegations were put to Primark this weekend, five months after an undercover investigation
began into Primark's British supply chain. The investigation focused on Manchester's textile
industry and in particular TNS Knitwear, which supplies 20,000 garments to the firm every
week. Fashion Waves, a supplier used by TNS, was also investigated.
Employees at both TNS and Fashion Waves were caught on film admitting their illegal status in
the UK. One Pakistani working on a Primark order tells how his visa had run out eight years ago,
yet he had remained in Britain working under the radar of the authorities. Working conditions
inside both TNS and Fashion Waves were also exposed as cramped and cold, in breach of health
and safety regulations. Most dramatically, the undercover journalist working at both units
captures cash-in-hand payments being made to her for gruelling hours. The money, apparently

2. paid without the knowledge of the taxman, amounts to about £3.50 an hour, £2.20 less than the
minimum wage. TNS Knitwear denies the allegations, and there was no comment from Fashion
Waves.
A Primark spokesman said last night that the issue was now a matter for the authorities. "Primark
was informed this week that one of the UK factories from which it buys some knitwear has
allegedly broken a number of UK employment, tax and immigration laws," he said. "Primark is
conducting its own investigation. Once that investigation is completed, it will decide how to
proceed. Meanwhile, Primark has handed all relevant information passed to the company over to
the relevant enforcement agencies so they may take action.
"We are extremely concerned about the very serious allegations made against our supplier TNS
Knitwear and against TNS's unauthorised subcontractor, Fashion Waves."
Meanwhile, the firm agreed last night to remove all references to the Ethical Trade Initiative, the
trade body that monitors Britain's top retailers, from its 140 storefronts across England, Scotland,
Wales and Northern Ireland.
The firm, as part of an agreement made with the ETI on Friday, must also remove ethical
branding from thousands of tills and its corporate website while investigations continue.
TNS Knitwear, which supplies some of Britain's most famous brand, is run by Pakistan-born
Zahid Sarwar, a British citizen and TNS director. Last night it denied any wrongdoing. TNS
Knitwear has made millions over the past five years from the so-called "fast fashion"
phenomenon where garments are tracked and rapidly reordered to make sure they keep flying off
the shelves. Sarwar's solicitors confirmed to the Observer that the company had been audited by
Primark in the past six months.
Primark said yesterday that it had initiated a "timed remediation programme" following the audit.
TNS was a "relatively small supplier", Primark added, saying that if the allegations proved to be
true, a deliberate attempt must have been made to mislead auditors.
On Primark's website, www.ethicalprimark.com, the code of conduct reiterates the
conglomerate's stance that wages and benefits paid to suppliers to their company for a standard
working week must meet national legal standards or industry benchmark standards, whichever is
higher. The same website states that working hours must comply with national laws and
benchmark industry standards, whichever affords greater protection. The firm also claims to
adhere to the ETI code of conduct.
Last night, the ETI said in a statement that it was investigating the latest scandal to hit Primark.
"We are horrified at the allegations of abuses exposed by this investigation and we are
particularly concerned that they involve an ETI member. First, we have met with Primark and
demanded that it provides us with a prompt, full and frank response to the allegations. Where
they are substantiated, the company has a clear obligation to work with the suppliers concerned
to put things right.

3. "Second, we have immediately launched a formal inquiry to establish whether or not there is a
systematic failure on Primark's part to implement the ETI base code. If such a failure were
established, this would be grounds for formal sanctions."
But last night Primark hit out at the ETI for forcing it into removing its ethical branding. A
spokesman said: "Primark is surprised and disappointed with the public stance adopted by the
ETI... The ETI is prejudging the situation by adopting this stance before Primark and the relevant
UK authorities have even had the opportunity of investigating the allegations made about TNS,
let alone report on the outcome of those investigations to the ETI."
Primark is expanding more rapidly than any other British retailer. The company is planning to
expand to Portugal, Germany and the Netherlands in 2009. Meanwhile, British shoppers can
expect more new stores in the UK, where Primark already operates 4.8 million sq ft of retail
space across 140 stores, employing 25,000 people. Its flagship Oxford Street store sold more
than one million garments in its first 10 days of trading.
Primark's parent company, Associated British Foods, which also controls Selfridges and owns
Twinings, Ovaltine, Ryvita, Jordans and Patak, as well as multi-billion-pound sugar and
agriculture interests, regards Primark as the jewel in its crown. Boosted by Primark's profits, the
company last year posted revenues of £8.2bn.
Business
Primark
Primark bucks downward trend on the high
street
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Kathryn Hopkins
The Guardian, Monday 23 February 2009 17.35 GMT

4. The Nottingham branch of Primark. Photograph: David Sillitoe
Primark, the discount clothing chain famous for its throwaway fashion, reported a surge in sales
over the past six months as cash-strapped consumers become increasingly price conscious.
The retailer, which has 187 stores in the UK, Ireland, Spain and the Netherlands, said yesterday
that its like-for-like sales rose by 5% in the six months to the end of February, compared with the
previous six months, with trading ahead of the expectations of its owner, Associated British
Foods. Sales increased during the Christmas holidays and underwear sold well over the
Valentine's period.
Maureen Hinton, senior retail analyst at Verdict Research, said: "Primark is doing well because
its target market is young and they are not so challenged by what's going on in the economy as
their parents. Its target market is still buying clothes because they're not being affected as much
by unemployment."
Primark has opened a new distribution centre at Thrapston, Northamptonshire, to support further
growth, and plans to open seven new stores in the next six months in places including Bristol,
Cambridge, Portugal and Germany.
"Discount fashion retailers continue to buck the trend," said Stephen Zatland, senior executive at
the consultancy Accenture Retail. "The 'fast fashion' model depends on responding quickly to
changing customer demands while still offering value for money. It sounds simple but this
proposition needs an excellent understanding of what your customers want and also efficient and
streamlined processes across the business."
However, the retailer's parent company, AB Foods, said that, when it presented figures for the
group on April 21, its half-year profit would be less than last year as a slump in its American
grocery business offset gains from Primark and from its Silver Spoon sugar refining business. It
said margins had been squeezed at its ACH Food Companies unit in North America, where
brands include Mazola corn oil and Karo corn syrup.Jeremy Batstone-Carr, of the stockbroking

5. firm Charles Stanley, said: "This upbeat trading news offsets disappointing trading in the group's
grocery operations, which will show a decline on last year after 'substantial' margin erosion at
ACH and the impact of consumers trading down as competitive pricing strategies have resulted
in weaker sales volumes in breakfast cereals.
"Underlying operating profit over H2 will be slightly lower than the previous year. The mix of
performance within the group's operations has deteriorated and margins across the business
therefore remain under downward pressure."
Shares rose on the back of the news from Primark but closed down 2% at 643p.