|Codes of Conduct of the Largest U.S. Retailers and Manufacturers of Apparel ( Chapter II)|
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Child Labor Report 2005
II. Codes of Conduct in the U.S. Apparel Industry
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.
(Source: Kurt Salmon Associates, Financial Profile for Fiscal Year 1995, July 1996)
2. Survey Response
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 countries.
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 industry.
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 and distributors.
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).
BOX II - 2
Fruit of the Loom
Jones Apparel Group
Levi Strauss & Co.
Sara Lee Corporation
b. Department Stores
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
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)
d. Specialty Stores
BOX II - 5
Burlington Coat Factory
e. Non-Store/Direct Apparel Marketers
All three Non-Store/Direct Apparel Marketers who were surveyed responded (Box II-6).
BOX II - 6
Non-Store/Direct Apparel Marketers
Home Shopping Network, Inc.
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