The Cheapest Dress is the World ($8.98): Part I

Photosource: Tony Cenicola for The New York Times

Maybe you read the article this week in the NY Times Style section on Steve & Barry’s incredibly low prices such as the $8.98 Sarah Jessica Parker dress?

Well even if not, the story raises some very interesting and important issues. I must admit, that after reading the article, I was left feeling a bit depressed and confused.

What is missing from this model? How can a dress of this caliber (e.g., designed by Sarah Jessica Parker, who obviously gets a cut from each garment) sell for $8.98 and STILL make a profit for Steve & Barry? What is missing from the economic model? Is this a classic case of market externalities in which there are a number of negative costs spilled out into the marketplace and more broadly into our environment that somehow get absorbed elsewhere now or in the future? Where are these additional costs getting absorbed? (and by the way, Steve & Barry’s is not the only company that can get clothing so cheap to make one’s eye’s pop – see also, Forever 21, Wal-Mart, Target).

What bothered me the most however is the fact that the company’s executives declared ‘ absolutely not’ to the notion that their clothes are made under sweatshop conditions. In fact, the management states openly that they ‘monitor [their] subcontractors carefully and demand ethical business practices,’ which I do not doubt. I bet they are telling the truth and that their subcontractors are complying with whatever local laws they need to comply with. So where is the missing link in this puzzle?

Having delved into the issues of organic and fair trade clothing production for quite some time now, I have a few conclusions and questions.

(1) When Steve & Barry and others talk about ethical business compliance, are they speaking to a very specific context: e.g., the country in which they are manufacturing the clothing under their subcontractor’s jurisdiction or international fair labor laws? I would fathom to say the later. For example, when a company declares they are compliant – that is with the local labor laws in whichever developing or other country they are subcontracting to (eg Kenya or China). If a subcontracted factory is either of those two mentioned countries (which we know they often are), we can be assured that human rights compliance, fair labor law enforcement and environmental stewardship is minimal to zilch. So the question: whose laws are we/they complying with? What is certain however is that companies like Steve & Barry’s are not member certified by accredited Fair Trade monitoring bodies such as the Fair Trade Federation and/or the European Fair Trade Labeling Organization (FLO). If they were, they would publicize that. We do know that these organizations set forth established criteria for fair wages and labor requirements in tune with international humanitarian standards, so if that standard is met –we can be assured some level of transparency. If not, then who knows? It’s a bit of a big black box.

(2) The last mile. Secondly, the other gaping hole appears to be in what I would like to term the ‘last mile’ of retail. This ‘last mile in the supply chain train’ is the point at which a majority of major brands and retailers step into the picture. This is where accountability begins and consumer awareness starts. But what about the first ten miles? What happens there? Do we even know? What sorts of compliance measures have been put in place, what environmental and social accountability exists – who is doing what and how is it done?

It may be fair to say that a majority of major American brands are primarily responsible for the ‘last mile of production and branding’ in the apparel industry, and not necessarily part of (nor want to be) privy to earlier steps in the supply chain. This has advantages for retailers and disadvantages for consumers. When it comes to accountability, who wants to be responsible for production starting with cotton growing, when you can take responsibility for just the last stitch on the cloth? By the way, there is a reason why less than 5% of global cotton production is organic. No one wants to take responsibility for the environment that much. This is one of the key reasons why the garments can get as cheap as they are, e.g., $8.98. Importantly, organic certification itself includes compliance with fair labor practices, so by gaining that certification, one also tackles the other issue simultaneously. But guess what – the demand starts with us – consumers. If we become more aware and we demand it, they will do it. We need to be better informed. Furthermore, as more and more companies take on this socio-enviro responsibility, the fabrics will get less expensive. Its that simple – but we must demand it.

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Stay tuned for Part II….coming soon!

3 Comments

  1. May 5, 2008 at 12:33 am

    That means if you spill a coffee on it you’ll be more upset by the cost of the latte you lost than the dress you just ruined.

  2. syansen said,

    May 5, 2008 at 2:07 am

    Good point!

  3. May 6, 2008 at 4:27 am

    [...] the first part of this post see Part I. This post is in response to last week’s NY Times Style section aricle on the world’s [...]


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