Kmart promises huge savings with factory shift to Indonesia

Photo credit: Google/Vadislav Serdeshnyi

Budget department store Kmart is known for its low prices, and they're expected to get even lower as the retail giant moves manufacturing to Java, Indonesia.

Some clothing prices will be reduced by more than 20 percent, Nine's A Current Affair programme reports. Designers claim they'll be able to order on such a scale that their goods will be cheaper and better quality.

The move is part of an exodus of manufacturers from China, where wages and operating costs have been rising.

But Kmart's managing director Ian Bailey told A Current Affair it doesn't mean Java's Kmart factory will see slave labour conditions.

"There's a minimum wage which is set by the area, which all these people are governed by, and many are paid more than that because they do a little bit of overtime and their base hours are a 40-hour week, Monday to Friday.

"All of us are looking for factories that do the right thing and pumping waste into rivers is no good to anyone in the long run. No good to us, no good to the community."

In Baptist World Aid Australia's 2017 Ethical Fashion Report, Kmart scored an A+ for 'Policies', but only C+ for 'Worker Empowerment'.

But the company is promising it isn't making "cheap and nasty" clothes. "We sell 800 million things a year. You don't have to make a lot of money on each thing for it to still be a very profitable business," Mr Bailey said.

The first 320 lower-priced items are expected on Kmart shelves in a matter of days, with hundreds more through the year, reports.