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Inditex praised for eco-friendly Berlin store, fined for Brazilian slavery

Inditex's youth brand Bershka has opened its first German store in Berlin this weekend. While the clothing company clearly wished to impress the trendy capital with an eco-friendly store, the slavery case in Brazil weighs heavily on Inditex's sustainable image. 

Platinum award for ecological design in Germany

The new store on Tauentzienstraße, with 1500 m² one of Bershka's largest in the world, will be awarded the platinum “Leadership in Energy and Environmental Design” certification, the highest category in one of the most demanding rating systems in the world. LEED stores have to follow the highest standards in energy conservation, waste reduction and sustainability. 

 

Currently, five Inditex stores have received the LEED certification, but according to the holding's “Sustainable Inditex 2011-2015” program, the aim is to make all of its stores LEED-certified by 2020. This would mean that the company's CO2-emission would be reduced by 30%.

... and fines for slavery in Brazil

While Inditex tries to work on its eco-friendly image, that does not necessarily mean that the fashion giant is human-friendly too. The Regional Superintendency of Labour and Employment of São Paulo found Bolivians working in slave-like conditions in a sweatshop for one of Zara's Brazilian subcontractors. Illegally transported to Brazil, they were locked in small apartments and were only allowed out to work – compulsory at least 12 hours per day. They were paid €0.7 for each dress they made (worth over €50 in Brazilian stores) and earned up to €69 per month, clearly under Brazil's – already low – minimum wages. 

 

Inditex has announced to appeal the fines imposed by the Brazilian Ministry of Work – about 500,000 euro – because it “cannot be held responsible for subcontractors who do not adhere to the Code of Conduct for External Manufacturers and Workshops of Inditex”, at the same time acknowledging that this was “a serious breach” of that Code. The group has promised to collaborate with the Ministry of Work “to ensure that such cases do not occur again”, but also stated not to change its working habits in Brazil. 

 

Probably for its efficient ways of working, Inditex has a real chance of making its way into the Eurostoxx 50, a list of the most valuable companies in the Euro-zone. Opening an eco-friendly store might well be an easier way to earn points for corporate responsibility than enforcing human-friendly circumstances in their own factories...

 

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Food

Mass faintings again baffle H&M factories

Hundreds of workers in a H&M clothing factory have fainted this week in the Cambodian province of Kampong Chhnang. So far, it is not exactly sure what caused the general fainting, but most analysts point to either poisonous chemicals used, extreme fatigue or a combination thereof.

Chinese subcontractor

Most sources say that almost 300 employers have fainted in the company, operated by a Chinese subcontractor of Hennes & Mauritz. A probable cause is the use of toxic chemicals during the production of clothing, which Greenpeace demonstrated just recently. “Workers stated there was a strange smell in the air, just before the the fainting began”, according to a police report.

 

Other sources point to the working conditions in the factory, where workers earn 20 cent per hour – forcing them to do far more than the 'normal' 48 hours per week. They state that most workers cannot afford to work only 48 hours per week (which earns them 42 euro per month), meaning the workers are de facto forced into overtime. 

Not the first case for H&M

Swedish giants H&M have decided to close the factory for a week, to investigate the events and to let the 4000 workers rest for a while. It is not the first “strange event” for H&M in Cambodia: last week 300 workers had already fainted in another factory. 

 

August appears not to be a good month for fashion retailers, after Zara was accused of slavery by Brazilian labour inspection. Inspectors had entered a factory of a local Zara subcontractor and found that the Zara factory was underachieving terribly compared to national and international labour regulations.

 

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Food

Vögele too suffers from strong Swiss Franc

Swiss fashion concern Charles Vögele has released very disappointing semi-annual results, with turnover dropping 10% to CHF 626 million (€552 million). 86% of this reduction was caused by the strong Swiss Franc – earlier also responsible for difficulties at Coop. Charles Vögele generates over two thirds of its turnover in the Euro-zone. 

First semester loss of 54 million euro 

The chain also announced a first semester loss of CHF 62 million (€54 million) – of which 30% would be directly caused by exchange rate losses. CEO André Maeder already announced to expect that the second semester will not be good enough to compensate for these losses. Last year, the group still had a net profit of CHF 18 million. 

Three pillar strategy

“The modernization strategy we have initiated is gradually having an effect, but is taking longer than expected”, says Maeder. The new strategy focusses on three pillars: “Fascination” (adopting actress Penelope Cruz and her sister as new faces of their campaigns), “Growth” (doubling the number of collections per year to eight) and “processes” (renewing the clothes in Vögele stores each six weeks). Still, new customers show up much later than expected.

 

The growth should be stimulated by launching a web shop for Switzerland, Austria, Germany and – starting from this autumn – the Benelux. The group also has 826 stores in 9 countries, of which 114 are in the Netherlands and 45 in Belgium. 

 

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Amazon enters iFlashfashion market with Myhabit

Food

Amazon enters iFlashfashion market with Myhabit

Amazon, the world's largest online retailer, has bought the small, members-only website Myhabit.com, similar to vente-exclusive.com or vente-privee.com.

App to fight "sold out" notifications

Every morning from 9 to 12, Myhabit sells brands like Doo.ri or Halston with reductions up to 60% until the stock is completely sold out. This need for speed often frustrates members, which is why Amazon plans to build an iPhone app to warn members in time. The app should be launched somewhere in the next three months.

 

“The Myhabit for iPhone app will allow our customers never to miss another offer, wherever they are. They will have the same user-friendly experience as the one they can find on the normal website, including 360° clips of real models wearing the clothing on offer”, says Maria Renz, Myhabit's president.

 

The app will also offer a preview for each session in the next two days, including a reminder function “to reduce the chance that the customer's favourite articles are already sold out”. Delivery in the US is free, European customers pay 15 dollar.

Competition from the French 

With Myhabit and the earlier acquisition of the Spanish flash fashion site BuyVIP, Amazon is directly entering competition with online shopping communities like Gilt Groupe, HauteLook and Rue La La. The main European competition will come from French Vente-privee, that soon will cross the Atlantic in the other direction. In March 2010, eBay had already entered the flash sales market with the opening of the Fashion Vault.

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