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Groups Press Big Retailers on Safety Overseas

May 18, 2013 by Leave a Comment

In a letter released on Thursday, the 123 signers, including the Presbyterian Church (U.S.A.), the Unitarian Universalist Association and the A.F.L.-C.I.O., urged retail giants like Wal-Mart, Target, Sears and Gap to sign on to the factory safety plan that more than 30 European retailers embraced this week.

The Interfaith Center on Corporate Responsibility, which helped put together the letter, said the signers controlled $1.1 trillion in investment assets.

Also Thursday, a second group of investment and pension funds controlling $1.35 trillion in assets, sent a letter to retailers, calling on them to ensure compliance with safety standards in Bangladesh and to disclose all of the factories they use — a demand that most major retailers have resisted.

The 118 religious groups and investors mentioned the Rana Plaza building collapse that killed more than 1,100 workers last month as well as a fire in November in Bangladesh that killed 112 workers, saying, “They are a grave indictment of the human rights record of Bangladesh, and an illustration of the failure of the global companies that manufacture and source their products there to ensure humane working conditions.”

The signatories pointed to decisions by some American companies, like Wal-Mart and Gap, to forgo signing on to the plan and instead set up their own factory inspection programs for Bangladesh, and criticized the moves as insufficient.

“Acting alone, companies can and do bring about meaningful and positive changes in human rights in the countries where they source and manufacture,” the signers wrote. “But when faced with intransigence of the type we have historically seen in Bangladesh on worker safety issues, we are convinced that systemic change will only occur when companies take action together.”

This week, numerous European retailers, including HM, Carrefour, Tesco, El Corte Inglés and Marks Spencer, rallied behind the new factory safety plan. Under it, companies commit to having tough, independent inspections of the factories they use in Bangladesh and to help finance renovations for fire and building safety, like building fire escapes on factories lacking them.

Of the nearly 40 companies that have signed that accord, only two are based in the United States: Abercrombie Fitch and PVH, the parent company of Tommy Hilfiger and Calvin Klein.

The signers of one letter, including Boston Common Asset Management, Christian Brothers Investment Services, Domini Social Investments, Trillium Asset Management, and Wespath Investment Management, investing on behalf of the United Methodist Church, highlighted the recent factory disasters.

“As shareholders who have been engaging apparel companies and retailers to foster responsible sourcing practices, including human rights due diligence with robust audit oversight in global supply chains, we see the events in Bangladesh as a watershed moment for the industry,” the letter said. “Regardless of whether products are being sourced from Bangladesh, Guatemala, China or the Philippines, morality dictates that the price/value calculus for all manufactured goods must begin with the fundamental human rights of workers, including health and safety, freedom of association and collective bargaining and a living wage.”

The second letter, signed by the New York State Common Retirement Fund, the California State Teachers’ Retirement System and 13 other institutional investors, warned retailers of the “significant reputational, operational and legal risks that are ubiquitous in global supply chains.”

“We expect companies in our portfolios to ensure the integrity of their supply chains,” the investors wrote. “We are dismayed by public statements from any company that states it is unaware that a factory produces its products.” After the recent factory disasters in Bangladesh, documents tying Wal-Mart and Sears to production at the facilities were found, but both retailers said suppliers were using those plants without their knowledge.

Other signers included Amalgamated Bank LongView Funds, the Connecticut state retirement plans, the Illinois State Board of Investment and the International Brotherhood of Teamsters Pension Plan.

“As investors, we feel it’s important to be clear in terms of what we want to say to the companies and to workers around the globe,” said the Rev. Seamus P. Finn, representing shareholders from the Catholic organization Missionary Oblates of Mary Immaculate. “There is no ad hoc, stitch-up solution to this. It’s got to be a serious systemic approach.”

Father Finn said that if the retailers rejected these appeals, the faith groups and investors would not divest their holdings, but would instead push harder by, for example, sponsoring shareholder resolutions.

“Our general approach is we stay and fight,” he said.

Also on Thursday, Democratic Senate and House leaders sent separate letters calling for higher standards in overseas factories. Eight Democratic senators — including Harry Reid of Nevada, the majority leader; Sherrod Brown of Ohio; and Tom Harkin of Iowa — sent a letter to Wal-Mart, Kohls, Gap, the Children’s Place, J. C. Penney and several other top retailers, urging them to join the international plan for factory safety in Bangladesh.

The senators wrote, “Your companies are in a position to put an end to these tragedies by requiring your suppliers to follow transparent processes and clear, enforceable standards for worker safety and basic human rights.”

In the House, Minority Leader Nancy Pelosi of California and several others wrote to the Bangladesh prime minister, Sheikh Hasina, urging that worker safety in that country be ensured.

This article has been revised to reflect the following correction:

Correction: May 16, 2013

An earlier version of this article misstated the number of institutional investors that signed a letter concerning safety standards and disclosure among apparel companies. There were 15, not 16.

Article source: http://www.nytimes.com/2013/05/17/business/global/investors-and-religious-groups-press-retailers-on-safety.html?partner=rss&emc=rss

Filed Under: Global Business Tagged With: , ,

Popular Wrench Fights a Chinese Rival

November 9, 2012 by Leave a Comment

One customer who recently spotted the new Craftsman tool, called the Max Axess wrench, thought it was an obvious knockoff, right down to the try-me packaging. “I saw it and I said, ‘This is a Bionic Wrench,’ ” recalled Dana Craig, a retiree and tool enthusiast in Massachusetts who alerted the maker of the Bionic Wrench. “It’s a very distinctive tool,” he added.

The tools have one significant difference, Mr. Craig noted. The Bionic Wrench is made in the United States. The Max Axess wrench is made in China.

The shift at Sears from a tool invented and manufactured in the United States to a very similar one made offshore has already led to a loss of American jobs and a brewing patent battle.

The story of the Bionic Wrench versus Craftsman, which bills itself as “America’s most trusted tool brand,” also raises questions about how much entrepreneurs and innovators, who rely on the country’s intellectual property laws, can protect themselves. For the little guy, court battles are inevitably time-consuming and costly, no matter the outcome.

Still, the inventor of the Bionic Wrench is determined to fight. He is Dan Brown, an industrial designer in Chicago who came up with the wrench after watching his son try to work on a lawn mower. Mr. Brown says he believes that the Max Axess wrench copies his own and he is planning to file suit against Sears, which declined to answer any questions about the wrenches for this article.

The Bionic Wrench is distinguished by its gripping mechanism, a circle of metal prongs that, inspired by the shutter in a single-lens reflex camera, descend evenly to lock onto almost any nut or bolt.

Since Sears has halted new orders, the Pennsylvania company that makes the Bionic Wrench has had to lay off 31 workers, said Keith Hammer, the project manager at the company, Penn United Technologies. “And that’s not to mention our suppliers,” he added.

Mr. Brown sees a broader issue than just the fate of his wrench. “Our situation is an example of why we’re not getting jobs out of innovation,” he said. “When people get the innovation, they go right offshore. What happened to me is what happened to so many people so many times, and we just don’t talk about it.”

Inventors typically spend $10,000 to $50,000 to obtain the type of patent Mr. Brown has on the wrench, said John S. Pratt, a patent expert at Kilpatrick Townsend Stockton in Atlanta. Though he said he could not comment on the merits of Mr. Brown’s potential suit, patent infringement cases can be especially difficult in the tool field, where many improvements are incremental, Mr. Pratt explained.

A defendant in such a case would most likely argue that either the tool did not warrant a patent in the first place, or that its own product did not violate the patent.

The fact that Sears made some changes to the wrench’s design, like making the grooves that allow the metal prongs to slide back and forth visible instead of hidden, will make the case more challenging, he said. “It’s hard for me to imagine that Sears isn’t particularly careful about breach of patent, so there’s probably another side to the story,” he said.

After patenting the wrench in 2005, Mr. Brown formed a company, LoggerHead Tools, to bring it to market, making a point of having it made in the United States.

The Bionic Wrench was greeted with enthusiasm at trade shows and in industrial design competitions, and the company survived the downturn in 2008. Mr. Brown resisted overtures from large chain stores that wanted to sell the tool under their proprietary brand, he said, and rejected the lure of cheaper manufacturing in China. “I was raised a different way,” he said.

The tool sold fairly well on its own — LoggerHead has shipped 1.75 million of them — but Mr. Brown, 56, who teaches industrial design at Northwestern University, says LoggerHead operated on a shoestring and he plowed much of the profit back into the company. “You cannot have big offices and fancy cars and everybody with an administrative assistant, because we are competing with China,” he said.

Article source: http://www.nytimes.com/2012/11/09/business/popular-wrench-fights-a-chinese-rival.html?partner=rss&emc=rss

Filed Under: Global Business Tagged With: , ,

Where Others Have Gone Without Success, J.C. Penney Goes Again

June 16, 2011 by Leave a Comment

It converted stores not attached to malls to Sears Grand stores, which carried food and pharmacy items beside traditional merchandise. A nostalgia-themed store with banjo music and glass jars of candy was tested in suburban Atlanta. The company tried new marketing slogans: “Sears. Where it begins” (2007); “Reimagine You” (2008); “Sears. Life. Well Spent” (2009).

It also improved online efforts, including introducing MyGofer, which allows people to order groceries online.

None of those efforts reversed Sears’s fortunes since Mr. Lampert took over in 2005. Last year, same-store sales in the United States at the company, which owns Sears and K-mart, dropped 1.6 percent. Revenue fell 1.7 percent, to $43.3 billion, results that were “completely unacceptable,” Mr. Lampert wrote in his annual letter to shareholders.

Reinventing retailing, as many chains have learned, is not easy. Yet J. C. Penney is setting out to rethink the shopping experience, announcing on Tuesday that it had hired Ron Johnson, who is in charge of Apple’s stores, as chief executive.

Analysts have said that if anyone can revive tired mall stores, Mr. Johnson is a good candidate to succeed. But the question remains whether tired mall stores can be revived.

“The way malls and department stores are now, I’m not sure there’s a compelling reason” to go, said Denise Lee Yohn, a marketing consultant who works with retailers. “It’s much easier right now to find what I’m looking for on the Internet.”

Mr. Johnson has not detailed his plans for Penney, but in an interview on Tuesday, he suggested that Penney and its competitors needed to change.

“In the U.S., the department store has a chance to regain its status as the leader in style, the leader in excitement,” he said, adding that he and the board could “take this great American brand and make it become something unbelievably exciting.”

Penney’s 2010 revenue rose 1.2 percent to $17.76 billion, and same-store sales — sales at stores open at least a year — increased 2.5 percent. But it “struggles with continued market share loss,” Michelle Clark, of Morgan Stanley, wrote this week in a note. Apple’s case study, however, has given hope to the industry. With its in-house tutorials, and products liberated from their boxes, Apple’s retail stores have earned admiration from shoppers and competitors alike and made the shopping experience cool again. It is that success that helped Penney’s stock rise 17.5 percent on Tuesday after Penney wooed Mr. Johnson from Apple.

Still, Mr. Johnson cannot merely clone Apple’s in-store features. Analysts said that the immediate problems involve changing consumer attitudes toward stores.

“The only reason I would go inside any kind of department store anymore is to return something I ordered online,” said Dorothy Duder, 58, who lives in North Hollywood, Calif.

She said she recently walked through a Penney store, and was unimpressed. “There was way too much merchandise on the floor,” she said. “I’d rather sit in my jammies at home, and have a cup of tea and shop.”

That sentiment is one the entire industry is trying to combat, analysts said.

“Penney’s is in the same boat as a lot of midtier department stores, which is, you’re not really differentiating yourself in the luxury space, and you’re not a value dollar store, a low-income driven retailer,” said Sherif Mityas, of the consulting firm A. T. Kearney. “So you need to create basically a reason for people to come into your store. Department stores in general are really almost too generic at this point, and you’re seeing it in their results.”

Several national store chains have devised strategies that have resulted in financial success.

Macy’s stores still look much as they did years ago, but now the merchandise is different. Macy’s chooses what it carries based on each store’s location and typical shopper profile. It also asks clerks to suggest items.

With localization, Macy’s has an “elevated consumer experience,” said Michael Dart, head of private equity and strategy at the consultancy Kurt Salmon.

In 2010, Macy’s same-store sales rose 4.6 percent, and revenue jumped 6.4 percent to $25 billion, which the company attributed largely to localization. PetSmart took another tack. It was facing intense competition from Wal-Mart, which generally offered lower prices on pet gear, and Amazon.com, which let shoppers avoid hauling boxes of cat litter around a parking lot.

So PetSmart redesigned its stores, relegating commodity items like food to the middle of stores. In the front and on the sides, to grab the attention of shoppers as they enter, it offers services like grooming, training, veterinary care and boarding.

“They said, what would Wal-Mart not do — dog grooming is on the list — and what is Amazon incapable of doing?” said Fiona Dias, executive vice president of strategy and commerce at GSI Commerce, a technology company that works with PetSmart.

Services contributed 10.9 percent of PetSmart sales in 2010, and the company’s total revenue grew 6.7 percent to $5.69 billion. Same-store sales rose 4.8 percent.

Converting shopping into an entertainment experience has helped Kiehl’s, which sells skin and hair care products at kiosks in department stores and stand-alone stores. It revamped its original East Village store, which now features a photo booth and a counter where visitors can order an egg cream.

The store has clerks who give consultations on skin care, an Indian motorcycle that Steve McQueen once rode and old-fashioned crank machines that dispense sample products.

The president of the United States division of Kiehl’s, Chris Salgardo ticked off the multitude of concepts that analysts predicted would crush retailers.

“Through the years, and certainly once QVC came on board — check, the death toll for the stores,” Mr. Salgardo said. “Then came the Web; we were all going to stay at home and shop in our pajamas — check, second death toll,” he said.

But worldwide sales for Kiehl’s increased 43 percent in 2010, compared with 2009. Though people can order from Kiehl’s online, “there are things that you’re going to be able to experience here that you won’t see at home,” he said. “It engages you, and it’s something that you’re never going to get online.”

Article source: http://www.nytimes.com/2011/06/16/business/16penney.html?partner=rss&emc=rss

Filed Under: Global Business Tagged With: , ,