Abercrombie & Fitch - Summary

Summary: Although most people now associate the Abercrombie & Fitch (A&F) name with sexually-provocative young models, A&F actually started out in the late 1800s as a store for outdoor/hunting enthusiasts. It was also the company that supposedly brought the game Mahjong to American and outfitted famous people of the early 20th Century like Charles Lindbergh (for his historic flight across the Atlantic). The company has changed hands several times: bought by Oshman Sports in 1978, then by the Limited Ltd. in 1988, finally becoming totally independent in 1998 and going public that same year.

Some Key Facts: Valued at $5 billion, the company now has revenues approaching $2 billion a year rolling in from 944 stores across four brands: Abercrombie & Fitch, abercrombie, Hollister and Ruehl. A&F sources from vendors in 37 countries and the US. The company sources its merchandise from approximately 258 factories and suppliers, primarily in Southeast Asia, and Central and South America.

A&F has been in the news for a number of issues:

• In 2005, a class action suit was filed against A&F on behalf of employees who alleged that they were wrongfully refused jobs or terminated based on their race, ethnicity, or national origin because they did not promote the "A&F Look." A&F settled with the employees for $40M and was forced to create an Office and Vice President of Diversity (other provisions of the settlement here.)
  
• In 2006, the Securities and Exchange Commission issued a formal order of investigation of the clothing retailer, and the trading in the company’s Class A shares.
• In 2002, A&F was one of 26 retailers to settle lawsuits filed by Sweatshop Watch, Global Exchange, Asian Law Caucus, Unite, and Saipan garment workers that alleged violations of U.S. labor laws and international human rights standards.
• A&F has been the target of boycotts and criticism for selling t-shirts with racist and sexist slogans.
• Nationwide Children’s Hospital in Columbus, Ohio has stated that it plans to rename its emergency room the "Abercrombie & Fitch Emergency Department and Trauma Center" in exchange for a $10 million donation. A letter written by the Campaign for a Commercial-Free Childhood, and signed by over 100 doctors and children’s advocacy groups, urged the hospital not to go ahead with the renaming, arguing that, "Given this company's appalling history of targeting children with sexualized marketing and clothing, no public health institution should be advertising Abercrombie & Fitch."

Ohhhh . . . that is quite an assortment of controversy for one brand. But, maybe these are just the kind of stories that help sell newspapers or attract private donations or build credibility for the organizations on the attack? Maybe A&F is doing a lot of other good things that we don't know about? Well,they are doing . . . something. Read more about it on the Template post and the Recommendation post.

Personally Speaking: I always got a kick of the MadTV A&F spoofs. Check some out here on YouTube, if you like that sort of thing. (Warning: like much of MadTV, they are often politically incorrect.)

H&M - Summary

Summary: Hennes & Mauritz (H&M) opened its first store in the U.S. in 2000. Called by some the "IKEA of specialty retail", the Swedish company has been a hit in the U.S. market, targeting the young and hip with cutting edge design for urban tastes and with affordable prices. H&M carries everything from business attire to casual wear to beach wear for women, men and children. I have been excited to see H&M's organic cotton pieces and their designs that benefit outside causes.

Although H&M is overall a leader in the fashion apparel sector on corporate social responsibility (CSR) issues, their 100% outsourcing of production (they have no factories of their own) presents problems in monitoring and enforcement of CSR commitments. After being criticized by activists in the late 1990s for the the company's lack of attention to labor rights in its supply chain (including a controversial expose on Swedish television), H&M began to actively respond through, among other things, developing a Code of Conduct for its suppliers and a compliance program. However, the company is still targeted for the low wages paid by some of its suppliers and was recently accused of anti-union activities by the AFL-CIO (although, in the end, the company received praise for allowing the workers to organize.)

In 2005, H&M stiffened its CSR inspections among its suppliers by increasing interviews with workers and introducing extra measures to ensure documentation such as time sheets and wage records were correct. The company also improved training for its 40-plus supplier auditing team. In 2006, while implementing this new, more detailed auditing program, H&M uncovered an increase in document forgery and abuses of child labor laws among many of its suppliers.

In 2007, an independent investigation of Indian-based H&M supplier Gokaldas Export (also a supplier for other brands like Marks & Spencer, Mothercare and Gap, Inc.) uncovered many violations of international labor laws, including harassment, forced overtime and wages below the legal requirement.

Some Key Facts:

• H&M is an apparel and cosmetics company headquartered in Sweden, where it was started in 1947.
  
• H&M sells clothes and cosmetics in approximately 1,500 stores in 28 countries, has approximately 20 production offices around the world, and more than 60,000 employees.
• H&M does not have any factories of its own, but instead works with around 700 independent suppliers in primarily Asia and Europe.
• The retailer sources more than 60% of its products in Asia, more than half of which come from China.
• The company is controlled by the family of Chairman Stefan Persson (the billionaire son of founder Erling Persson); they own nearly 37%.

Personally Speaking: I was really excited to find out that H&M was coming to America. While in Europe for work in the late 1990s, I enjoyed browsing the racks of the H&M stores on my travels. I remember visiting that poor first store in NYC soon after it opened to find it looking like it has just been ripped apart by a tornado of fashionistas desperate for cheap Euro-fashion. I like H&M because you can find affordable pieces that are well-made (but also some that are NOT). Although many of the designs are targeted to younger audiences (and cut for the slim slim slim), I can always find something that is a little avant garde, but still appropriate for a professional 30-something.