How Ethical Labels Operate By Barbara Walshe

Building up an ethical fashion brand can be risky business. Barbara Walshe reveals how People Tree had become the biggest and the best known around.

Ethical labels

A surge in ethical fashion labels springing up across the UK over the last five years confirms that consumers are no longer willing to compromise their values when buying clothes.

Yet many of these new brands are niche businesses run by designers with small supply chains, which makes it easier to deliver on their ethical, organic and Fairtrade promise. What happens when they want to grow?

This was a challenge People Tree faced when they started out 18 years ago. Research, persistence and sheer hard work has helped them create an environmental supply chain that has made them one of the biggest and best-known brands in the ethical fashion world.

Alongside working with 50 Fairtrade organisations across 15 countries, they now employ 250 women direct, pay 30 per cent more than other local factories and provide work for a further 3,000 marginalised people ranging from farmers to artisans.

This year, Safia Minney, People Tree chief executive, has pledged to grow their business by 40 per cent year on year, which will bring jobs to poor communities and change lives for the better.

But even for an established ethical brand, this is no easy task. Here are some of the obstacles they’ve had to overcome.

Payment upfront

Unlike the rest retail world, where payment is made after the products are delivered, ethical labels like People Tree must pay their suppliers 50 per cent upfront to buy materials and pay employees so they can afford to live while doing the work. But there are risks attached to this. If the clothes don’t sell, it is People Tree who faces the financial fall out. “It’s like going out there in a Gale Force 8,” says Minney. “It’s very hard and very risky.”

Slow, steady growth

Growing fast and furiously may be the intention of conventional retailers, but for ethical fashion brands, the opposite is the case. In fact, in extreme cases, unsustainable growth can become a matter of life and death. A sudden decrease in sales, for example, can lead to job losses and hence the loss of a whole family’s means of living. Minney says: “We constantly have to look at what we are developing to ensure a particular group of hand weavers, say, have work every six months. It’s very different to how the conventional fashion industry works.”

Finding the right investors

Funding for ethical fashion businesses is still very difficult to find. Even for traditional fashion brands, investment takes years to recoup. With a Fairtrade one, it’s even longer, with a portion of the profits often re-invested back into the marginalised communities. People Tree’s profits have led to schools, hospitals and accommodation being built that benefits their employees and families. Hence, finding the right investors is vital. “They’re people who are very passionate about not only creating good financial return but also seeing an environmental and social return for their investment,” says Minney, who secured another round of investment for People Tree last year. “Unless you are continually investing in product development and technical support and marketing and communications, it becomes very challenging to stabilise orders.”

Collaborating with right people

Designer capsule collections have transformed high street brands like Topshop, New Look and H&M. The same principal can be applied to ethical brands. People Tree’s work with Eley Kishimoto, Karen Nicol and Bora Aksu has raised awareness of ethical clothing and boosted the brand’s style credentials. Celebrity collaborations can be similarly effective when chosen wisely. Harry Potter actress Emma Watson launches her latest collection for People Tree this month, and Minney says: “It has opened up a whole new market to Fairtrade, a market of 16 to 25 year olds who have been buying fast fashion and not really thinking about it.”

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