April 26, 2024

Fair-Trade Movement Extends to Clothing

With fair-trade coffee and organic fruit now standard on grocery shelves, consumers concerned with working conditions, environmental issues and outsourcing are now demanding similar accountability for their T-shirts. And some retailers are doing what was once unthinkable, handing over information about exactly how, and where, their products were made.

Everlane, an online boutique, last week added paragraphs to its Web site describing the factories where its products are made.

Nordstrom says it is considering adding information about clothes produced in humane working conditions.

An online boutique breaks down the number of workers involved in making each garment and the cost of every component, while a textiles company intends to trumpet the fair-trade origins of its bathrobes when Bed Bath Beyond starts selling them this month.

And a group of major retailers and apparel companies, including some — like Nike and Walmart — with a history of controversial manufacturing practices overseas, says it is developing an index that will include labor, social and environmental measures.

New research indicates a growing consumer demand for information about how and where goods are produced. A study last year by professors at the Massachusetts Institute of Technology and Harvard showed that some consumers — even those who were focused on discount prices — were not only willing to pay more, but actually did pay more, for clothes that carried signs about fair-labor practices.

“There’s real demand for sweat-free products,” said Ian Robinson, a lecturer and research scientist at the University of Michigan who studies labor issues. Consumers “don’t have the information they need, and they do care.”

The garment factory collapse that killed more than 800 workers in Bangladesh last month has added urgency to the movement, as retailers have seen queries stream in from worried customers.

“In the clothing industry, everybody wears it every day, but we have no idea where it comes from,” said Michael Preysman, Everlane’s chief executive and founder. “People are starting to slowly clue in to this notion of where products are made.”

Major retailers have long balked at disclosing the full trail, saying that sourcing is inherently complex — a sweater made in Italy may have thread, wool and dye from elsewhere. Another reason: Workplace protections are expensive, and cheap clothes, no matter where or how they are manufactured, still sell, as HM, Zara and Joe Fresh show through their rapid expansion.

But labor advocates note that consumers’ appetite for more information may put competitive pressure on retailers who are less than forthcoming. In recent weeks, government officials, including Chancellor Angela Merkel of Germany, and labor and consumer advocates have cited the Bangladesh collapse in calling for the adoption of fair-trade standards or labeling. In direct response to what happened in Bangladesh, Everlane added information to its Web site about the factories where its clothing is made. “This factory is located 10 minutes from our L.A. office,” one description for a T-shirt reads . “Mr. Kim, the owner, has been in the L.A. garment business for over 30 years.”

Everlane says it will soon add cost breakdowns for all of its clothing, along with photographs of factories where that clothing is made and information about the production.

Mr. Preysman says Everlane has long received questions from customers “around where the products are sourced from and how we can tell that the labor is good.” It is an inexact science, he said. But he added that he looks for factories certified by independent outside organizations and has executives spend time with a factory’s owner to see if he or she “is a decent human being.”

Honest By, a high-fashion site introduced last year, includes even more specific information about its products. Take a cotton shirt that costs about $320: it took 33 minutes to cut, 145 minutes to assemble and 10 minutes to iron at a Belgian factory, then the trim took an additional 10 minutes at a Slovenian plant. The safety pin cost 4 cents, and transportation about $10.50.

Bruno Pieters, the site’s founder, said by e-mail that “as long as we keep paying companies to be unsustainable and unethical, they will be.” But, he said, that may be changing. He cited a spike in sales that he asserted was in response to issues raised by recent overseas sourcing disasters.

Lush Cosmetics, a company based in Britain, has added video from its factories and photographs from buying trips to places like Kenya and Ghana to its Facebook page. Simon Constantine, head perfumer and ethical buyer, said he would like to add links to the factories Lush buys from, to encourage other cosmetics companies to support them.

Nordstrom said it had provided factory information in response to shoppers’ calls, and was considering going a step further, said Tara Darrow, a spokeswoman. The Nordstrom Web site specifies eco-friendly products, “so how can we do the same with people-friendly?” Ms. Darrow asked. “Hearing from customers and knowing they care definitely compels us to want to do more.”

A variety of groups are working on new apparel industry labor standards.

Article source: http://www.nytimes.com/2013/05/09/business/global/fair-trade-movement-extends-to-clothing.html?partner=rss&emc=rss

Foxconn Tries to Move Beyond Apple’s Shadow

But now Foxconn, a potent symbol of the perks and perils of globalization, is taking a step that, not all that long ago, would have seemed unthinkable: it is contemplating life far, far beyond Apple.

Foxconn, which is based here but does most of its manufacturing in mainland China, wants to reduce its reliance on Apple. Its new strategy is a shift away from making products that other companies design, and toward developing products of its own, with an especially aggressive push into designing and manufacturing large, flat-screen televisions.

“Foxconn senses that the Apple aura isn’t as invincible as before,” said Jamie Wang, an analyst at the research firm Gartner. “So they are worried that they need something besides Apple’s business that will allow them to grow.”

As the biggest contract manufacturer for American electronics companies like Apple, Dell, Hewlett-Packard and Amazon, Foxconn has been faced with labor unrest, worker suicides, industrial accidents and complaints about working conditions and labor practices. It has been working with many of its client companies to improve conditions, raise pay and improve labor standards. On a drizzly April afternoon at the headquarters of Foxconn Technology here, 300 employees gathered to burn incense and fake money in front of a statuette of Lord Guan, a Taoist deity. Mr. Gou, the chairman of Foxconn and a Taoist, had the statuette flown in from Shanxi Province in mainland China, carrying it himself to the door of his manufacturing empire. In Chinese tradition, Lord Guan is considered the go-to god for good business.

Good business is something Foxconn, one of the world’s largest contract electronics manufacturers, needs right now. Last month, Foxconn, also known as Hon Hai Precision Industry, reported that first-quarter revenue was dragged down 19.2 percent compared with the same period last year because of declining iPhone and iPad orders from its main customer, Apple.

Apple representatives declined to comment on the developments at Foxconn. But analysts estimate that Apple contributes at least 40 percent of Foxconn’s revenue. Moving beyond Apple could prove tricky; it is hard to make money in televisions these days, as many of the Japanese electronics companies can attest. And only 20,000 of Foxconn’s 60-inch TVs have been sold in Taiwan, according to Simon Hsing, Foxconn’s spokesman, who declined to disclose sales volumes from any other partners.

Foxconn’s predicament mirrors a common problem faced by Taiwanese contract manufacturers, whose fortunes depend heavily on those of their clients. A handful of manufacturers, like HTC and Asustek Computer, have managed to shed their contract manufacturing businesses altogether to develop branded products. But as they began competing with clients, those clients began deserting them.

Here is Foxconn’s problem captured with two sets of statistics. Global demand for LCD televisions declined 1 percent in 2012 compared with the previous year, and demand for all TVs dropped 6 percent, according to NPD DisplaySearch. Worldwide PC shipments fell 13.9 percent in the first quarter of 2013, compared with the same period a year earlier, according to IDC.

As a result, profits for many manufacturers are slumping.

“Taiwan companies have always relied on being a contract manufacturer and outsourcing manufacturer,” said Luo Huai-jia, vice president at the Taiwan Electrical and Electronic Manufacturers’ Association. “Now we need to start looking at original design manufacturing and directly matching the needs of consumers.”

Kay Chiu, vice president of Foxconn’s consumer electronics division, said in response to e-mailed questions that consumer interest and vertical integration — controlling all the steps in the supply chain — were behind the shift in production. “We still need to leverage business development partners’ advantage to provide an attractive and most competitive product to the market,” Mr. Chiu said. Other top Foxconn executives declined several requests for comment.

Article source: http://www.nytimes.com/2013/05/07/business/global/foxconn-tries-to-move-beyond-apples-shadow.html?partner=rss&emc=rss