D. Codes of Conduct of the Largest
U.S. Retailers and Manufacturers of Apparel
1.Survey of U.S. Retailers and Manufacturers of Apparel
In order to gather information on the extent and
implementation of U.S. garment importers' codes of conduct containing child
labor provisions, the Department of Labor conducted a voluntary survey of
the largest U.S. retailers and apparel manufacturers, based on 1995 annual
sales figures.58 The companies included in the
survey were chosen on the basis of public annual sales data obtained from
Kurt Salmon Associates (KSA), a consulting firm specializing in retailing,
apparel, textiles, and other consumer products.59
A questionnaire on import sourcing and child labor policies
was sent to the 48 U.S. retailers and manufacturers of apparel listed in Box
II-1. (See Appendix B for a copy of the questionnaire.) Survey recipients
included the largest companies in the following categories: apparel
manufacturers, department stores, mass merchandisers, specialty stores, and
non-store direct marketers (mail order and electronic home shopping). This
chapter's analysis of codes of conduct is based primarily on information
voluntarily provided by the companies surveyed.
BOX II - 1
Top Retailers & Apparel Manufacturers
1. Sara Lee Corporation
2. Levi Strauss & Co.
3. VF Corporation
4. Fruit of the Loom
5. Liz Claiborne
6. Phillips-Van Heusen
7. Kellwood Company
8. Russell Corporation
9. Warnaco Group
$ 916 million
10. Nike, Inc.
$ 897 million
11. Jones Apparel Group
$ 776 million
12. Oxford Industries
$ 657 million
13. Hartmarx Corporation
$ 595 million
14. Tultex Corporation
$ 585 million
15. Salant Corporation
$ 501 million
1. Sears Roebuck & Company
2. JCPenney Company
3. Federated Department Stores
4. May Department Stores
5. Montgomery Ward Holding Company
$ 7.085 billion
6. Dillard Department Stores
$ 5.918 billion
$ 4.113 billion
8. Mercantile Stores Company
$ 2.944 billion
9. Kohl's Corporation
$ 1.926 billion
10. Neiman Marcus Group
$ 1.888 billion
1. Wal-Mart Stores
2. Kmart Corporation
3. Dayton Hudson Corporation
5. Waban Inc.
$ 3.978 billion
6. Ames Department Stores
$ 2.120 billion
7. Venture Stores
$ 1.929 billion
8. Shopko Stores
$ 1.853 billion
9. Dollar General Corporation
$ 1.764 billion
10. Family Dollar Stores
$ 1.547 billion
1. Woolworth Corporation
2. The Limited
3. The Marmaxx Group
4. The Gap
5. Burlington Coat Factory
6. Ross Stores, Inc.
7. The Talbots, Inc.
$ 981 million
8. Stage Stores, Inc.
$ 683 million
9. County Seat Stores, Inc.
$ 619 million
10. The Dress Barn, Inc.
$ 501 million
Non-Store/Direct Apparel Marketers
1. Spiegel, Inc.
2. Home Shopping Network, Inc.
3. Land's End, Inc.
(Source: Kurt Salmon Associates, Financial Profile for
Fiscal Year 1995, July 1996)
2. Survey Response
Forty-five companies responded to the survey.60
Of the 45 responses, 42 were reportable because three companies regard all
information provided as confidential.61
Many respondents indicated that they are significant
importers - some importing more than half of the merchandise they sell -
while others said that their dependence on imports was much lower, in some
cases less than 10 percent. Nearly all respondents are direct importers of
apparel, i.e., they purchase apparel directly from abroad for their own
account. Most are also indirect importers, i.e., they purchase products
domestically that have been manufactured overseas and imported into the U.S.
by another party.
Of the 15 manufacturers who responded, all but three (Nike,
Inc., Liz Claiborne and Russell Corporation) own or have ownership interest
in overseas production facilities. Most of these facilities are in Latin
America, Mexico, Canada and the Caribbean, but a few are in Asia (China, Sri
Lanka, and the Philippines). Some of the manufacturers (Oxford Industries,
Sara Lee Corporation, and VF Corporation) indicated that the majority of
their imports come from wholly owned plants. Virtually all of the
manufacturers surveyed also contract out at least some of their overseas
production to non-company-owned facilities. Some manufacturers have close
ties to certain contractors, and account for a large share, if not all, of
the merchandise that they manufacture. In other cases, they may use a
contractor facility for only a short time, and account for a small share of
that manufacturer's production.
Some of the manufacturers referred to the advantages of
spreading their production across many countries in order to avail
themselves of available import quota. Nike, Inc. ('Nike') for example,
stated that it is constantly seeking out new apparel suppliers due to the
limited amount of quota available in each country for importing apparel into
the United States. Others indicated that they source from only a few
Most of the manufacturers also use local buying agents. Only
three (Levi Strauss & Co., Fruit of the Loom, and Nike) specifically stated
that they do not use buying agents. A few manufacturers indicated that they
mainly use buying agents in countries where they do not have their own
production facilities or extensive knowledge of the countries' garment
None of the retailers responding to the survey indicated
that they own or have an ownership interest in overseas production
facilities. Many of them import from a very large number of suppliers and
contractors in many countries. JCPenney Company, for example, contracts with
more than 2,000 suppliers in more than 80 countries. Retailers who sell
private-label merchandise often deal directly with overseas contractors, who
manufacture merchandise to their specifications. Other retailers, who do not
carry private label garments, indicated that they purchase imported goods
that are already made from a variety of suppliers in the U.S. or abroad.
Several of the retailers surveyed (Ames Department Stores,
Dress Barn, Inc., Home Shopping Network, Inc., Mercantile Stores Company,
Ross Stores, Inc., Stage Stores, Inc.,62 Venture
Stores and Woolworth Corporation) indicated that they purchase all or most
imports through one or more buying agents or suppliers located in the U.S.
and/or abroad. One retailer (BJ's Wholesale Club, a division of Waban, Inc.)
indicated that it only buys imported apparel domestically from wholesalers
3. Survey Results
Of the 42 companies that provided reportable responses to
the survey, 36 have adopted some form of policy specifically prohibiting the
use of child labor in overseas production facilities. Thirty-four have
developed their own policies, and two have adopted the policy of their
association or buyer. Appendix C contains the current codes, policies and
other documents that were provided by survey respondents.63
Questionnaires were sent to 15 garment manufacturers, all of
which responded (Box II-2).
All 15 manufacturers - Fruit of the Loom, Hartmarx
Corporation, Jones Apparel Group, Kellwood Company, Levi Strauss & Co.,
Liz Claiborne, Nike, Inc., Oxford Industries, Phillips-Van Heusen, Russell
Corporation, Salant Corporation, Sara Lee Corporation, Tultex Corporation,
VF Corporation and Warnaco Group - have adopted some form of policy
prohibiting child labor in overseas production facilities.
Fourteen of the 15 manufacturers have developed their own
policies, most of which are in the form of codes of conduct, statements of
principles, vendor requirements, or terms of engagement.
Hartmarx subscribes to a "Statement of Responsibility"
developed by the American Apparel Manufacturers' Association (AAMA), which
contains a provision on child labor.
Two manufacturers - Levi Strauss & Co. ('Levi Strauss')
and Warnaco Group ('Warnaco') - also have guidelines for selecting the
countries where they produce garments based on political, social and human
rights concerns, among others. Levi Strauss, for example, does not do
business in Burma.64
BOX II - 2
Fruit of the Loom
Jones Apparel Group
Levi Strauss & Co.
Sara Lee Corporation
b. Department Stores
Questionnaires were sent to 10 department stores, eight of
which responded (Box II-3).65 Seven of the eight
responses were reportable.66
BOX II - 3
Dillard Department Stores
Federated Department Stores
Kohl's corporation (Response not reportable)
May Department Stores (Did not respond)
Mercantile Stores Company
Montgomery Ward Holding Company
Neiman Marcus Group (Did not respond)
Sears Roebuck & Company
Six of the seven department stores that provided
reportable responses to the survey - Dillard Department Stores, Federated
Department Stores, JCPenney, Mercantile Stores Company, Nordstrom and
Sears Roebuck & Co. - have adopted some form of policy statement that
specifically addresses child labor in overseas production facilities.
All of the seven have developed their own policies on this
Montgomery Ward said that it does not tolerate the use of
child labor in the manufacture of imported goods, but did not provide the
Department of Labor with documentation of a formal policy. The Company
subscribes to the National Retail Federation's code, which does not
specifically mention child labor.
c. Mass Merchandisers
All 10 mass merchandisers who were sent questionnaires
responded (Box II-4). Nine of the responses were reportable.67
BOX II - 4
Ames Department Stores
Dayton Hudson Corporation
Dollar General Corporation
Family Dollar Stores
Shopko Stores (Response not reportable)
Six mass merchandisers - Dayton Hudson Corporation, Dollar
General Corporation,68 Kmart Corporation, Price/Costco, Inc., Venture
Stores and Wal-Mart Stores - have adopted policies specifically addressing
child labor in overseas production facilities.
All of these six have developed their
own policies on child labor.
Three mass merchandisers - Ames Department Stores, Family
Dollar Stores and Waban, Inc. - indicated that they do not have a policy
specifically addressing child labor in overseas facilities.
Ames Department Stores ('Ames') indicated that all
purchase orders issued on behalf of Ames or any of its affiliates require
compliance with, among other laws, the U.S. Fair Labor Standards Act (FLSA)
and the "Federal Child Labor Act."69 It is not
clear whether Ames' purchase orders contain any language on international
Family Dollar Stores ('Family Dollar') indicated that its
purchase orders include a requirement that vendors comply with all labor
laws. The company also indicated that it utilizes the National Retail
Federation's (NRF) "Statement of Principles on Supplier Legal Compliance,"
which does not contain a provision specifically addressing child labor.
Waban, Inc. ('Waban') indicated that it does not have a
code of conduct regarding labor practices in overseas production, but
generally requires that vendors comply with all applicable laws.
d. Specialty Stores
Surveys were sent to ten specialty stores, nine of which
responded (Box II-5).70 Of the nine responses,
eight were reportable.71
BOX II - 5
Burlington Coat Factory
County Seat Stores, Inc. (Did not respond)
Ross Stores, Inc.
Stage Stores, Inc.
The Talbots, Inc.
The Dress Barn, Inc.
The Marmaxx Group (Response not reportable)
Six specialty stores - the Dress Barn, Inc., The Gap, The
Limited, Stage Stores, The Talbots, Inc. and Woolworth Corporation -
indicated that they have adopted policies specifically addressing child
labor in overseas production facilities.
Of the six, all but Stage Stores have developed their own
policy. Stage Stores indicated that it purchases all imported merchandise
through the Associated Merchandising Corporation (AMC) and uses AMC's
code, which contains a provision on child labor. Stage Stores also stated
that it is in the process of developing its own code.
Two specialty stores - Burlington Coat Factory and Ross
Stores, Inc. - do not have a policy specifically addressing child labor in
overseas production facilities.
Burlington Coat Factory does not have a policy
specifically addressing child labor in overseas production facilities, but
does have a provision in its purchase orders requiring vendors to comply
with all applicable laws, including the Fair Labor Standards Act.
Ross Stores has guidelines in its purchase orders that
require compliance with all applicable federal, state and local laws and
regulations, including the federal child labor law,72
but these guidelines do not appear to address international production.
Ross Stores is currently reviewing its importing process, however, and
considering revising its "Conditions of Contract."
e. Non-Store/Direct Apparel Marketers
All three Non-Store/Direct Apparel Marketers who were
surveyed responded (Box II-6).