In high fashion circles -- which I certainly don't cavort in -- Zara is known as a smart bargain brand (when compared with more expensive labels). Its devotees like the speed with which Zara responds to the latest fashion whim. But they most certainly don't like the ethical sourcing violations that enable them to bring to market the latest and greatest quickly and efficiently -- and turn their inventory faster than competitors. According to Procurement Leaders, Zara has once again been accused of ethical sourcing violations -- this time on the tier two and lower levels in their supply chain. According to Procurement Leaders, "Zara has shut down a supplier's factory in Bangladesh after workers complained of ill-treatment." One worker at the supplier's facility was quoted as saying, "If we make any kind of small mistake they beat us and or they deduct our wages."
This latest accusation comes only two years after a similar ethical sourcing indictment of Zara in 2006. I covered that episode on Spend Matters in a previous post, noting, "Zara, the mostly vertically integrated retailer famous just as much for its supply chain as its fashionable threads, can now add another credit to its list of accomplishments: child labor ... Zara is more famous for its fast, nimble supply chain than its choice in cheap labor. Perhaps this is how they can afford to air freight shipments to stores worldwide -- which they have been known to do." This latest incident is further proof that companies need to treat the behavior and business practices of their suppliers in the retail supply chain as if it were their own. Anything less creates significant brand exposure.
- Jason Busch