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Acne Studios Social Report 2012
Acne Studios Social Report 2012
Acne Studios Social Report 2012
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ACNE STUDIOS
The head office of Acne Studios is located in Stockholm, Sweden and employs around 100
people. The following departments are operated from the head office: Design and Production,
Distribution (Wholesale and Retail), Logistics, Finance, IT and PR & Marketing.
In addition to the head office in Stockholm there are country offices in France, UK, Germany,
Denmark, Norway and USA, as well as concept stores in Amsterdam, Antwerp, Bergen, Berlin,
Copenhagen, Gothenburg, Hamburg, London, Melbourne, New York, Oslo, Paris, Stavanger,
Stockholm, Sydney and Tokyo.
Acnes CSR operations are directed by our CSR Manager and organized within the Design and
Production Department. This department includes three functions: design, product
development & production, and business. These functions are arranged into one womens and
one mens team. While designers, product managers, pattern makers and assistants in most
cases are attributed to one of the two teams, the CSR manager and the other staff within the
business function work across both teams.
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CONTENTS
1.
2.
SOURCING STRATEGY.................................................................................................................. 5
3.
2.1.
2.2.
2.3.
PRODUCTION CYCLE
2.4.
SUPPLIER RELATIONS
2.5.
CHINA
3.2.
TURKEY
3.3.
ROMANIA
3.4.
ALBANIA
3.5.
ITALY
3.6.
OTHER
4.
5.
5.2.
5.3.
6.
7.
8.
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2. SOURCING STRATEGY
2.1. SOURCING STRATEGY & PRICING
Acne Studios designs, markets and distributes high-end fashion. Our product range includes
mens and womens clothing, shoes, bags and accessories. Below is the distribution of our
production per country in 2012.
Percentage of
orders (value)
The above graph shows the percentage of production per country based on purchase costs. For
instance, compared to 2011, the order value for China has increased by around 10%, while the
order value for Italy has increased by around 5% and the order value for Lithuania has
decreased from around 10% to 5%. The order value for Turkey remains almost the same as the
year before.
Our production is made on CMT, CM or full price terms. Price negotiations are undertaken both
at an early development stage but also with the order figures in hand. We are always looking for
good value for money; that said, we are never willing to compromise on our design or product
quality and we always strive for prices to be reasonable in both parties perspective.
In general, we have direct business relationships with our suppliers, but in case of working
through agents, we always strive to have direct contact with the factories as well. The reasoning
behind this is to keep control of everything from development and production to CSR
conditions.
Our goal is to have a supplier base that can meet all our different requirements. We are always
open to find new suppliers to work with, but we never initiate a collaboration before we feel
secure that the supplier in question is one we can trust and want to establish a long-term
relationship with. We continuously evaluate our suppliers based on different parameters such
as communication, prices, deliveries, CSR, etc.
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The production orders are placed based on external and internal (our own stores) orders of the
collections and only include a small element of stock ordering for in-season orders. In addition
to the large seasonal orders that are placed at the end of each selling period, we are also
working with reorders within the store seasons and never out of stock (NOS) programme with
continuous reorders. The production lead-times vary between just a few weeks up to half a year
and are dependent on internal planning, the capacity of our suppliers and fabric lead-times.
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supplier is based in a high-risk country. If the supplier is expected to be a long term supplier
with us either the CSR Manager or the team leader normally visits the factory as well to get a
better knowledge of the facilities and the conditions there.
The next step in our monitoring program includes either a monitoring audit conducted by our
CSR Manager and a FWF auditor or a full FWF audit. If the CSR Manager has not visited the
factory before, and if the supplier is new, it is normally better to start with a monitoring visit to
get an initial idea of the working conditions and what needs to be improved. The visit also gives
us information on possible subcontracting. A thorough audit is better to conduct after a while,
when a mutual understanding and trust between us and the supplier has been established.
A Corrective Action Plan (CAP) on findings and what needs to be improved is established after
each audit. Normally a time frame for improvements is discussed during the end of the audit, as
our CSR Manager always attends all audits. Follow-up on improvements is conducted through
the CAP documents via e-mail or in follow-up audits on site.
An important part of the monitoring system is ensuring that our Code of Conduct, including the
contact details to the complaints handler, is posted visibly at our suppliers. In addition to these
procedures with audits, CAPs and complaints handling, we encourage suppliers to attend the
trainings offered by FWF. In 2011, for instance, five Acne suppliers attended training in Turkey.
We were placing production with around 80 factories during 2012. Below statistics shows the
percentage of our suppliers based on order value that are in countries classified as low-risk and
suppliers in high risk countries. China, Turkey, Romania and Albania are example of countries
classified as high-risk when it comes to violation of our code of labour practices.
In 2012 we had made full FWF audits in over half of our suppliers in high risk countries. In
addition we have made several shorter monitoring audits at suppliers in these countries. Our
goal for 2013 is that we should have made full FWF audits at over 90% of our suppliers in high
risk countries.
RISK DISTRIBUTION AND PERFORMED AUDITS
Production in low risk countries
32%
Production in high risk countries
68%
Audits performed in high risk in 2012
56%
Audits performed in high risk after 2013 94%
3.1. CHINA
China is one of our three main production countries. During 2012 we had relationships with 16
factories. For 2013 we have quit working with five of them in two cases due to CSR reasons.
One factory is used through an agent and one is a subcontractor that a knitwear supplier has
been using. The reason is because these factories have showed little interest in working
according to our Code of Labour practices. The other three suppliers have been cancelled
because of other reasons such as lead-times and design preferences. None of the factories we
left have been suppliers where we were a major customer.
During 2012 we conducted two full FWF audits and four monitoring visits together with a FWF
auditor. At one supplier we also made additional off-site interviews with workers.
Improvements of findings were notable at two of the suppliers where we conducted full FWF
audits compared to the audits made in 2011. We saw improvements in terms of wages and
compensation and reduced overtime. For example the mode wages in the 2 biggest
departments (sewing and cutting was found to be above living wage level estimated by Asia
Floorwage. These are important suppliers for us and we work more or less directly with the
factory. Still there are findings that need to be improved. For instance, one factory is going to
ACNE STUDIOS SOCIAL REPORT 2012
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quit working with a subcontractor that we dismissed after a monitoring visit and one needs to
improve on health and safety issues. This is currently being discussed with the supplier.
At three other suppliers where we conducted monitoring visits, we found they are using double
bookkeeping to conceal information on actual wages and working hours. We have noticed that
this is common in the Guangdong area where excessive social auditing is performed by different
auditing firms. Two of these three suppliers have admitted to using double book keeping and
will improve until the next audit, and the third one we are still discussing with, as they also had
other issues.
In addition we also made a monitoring visit at a silk dye house which included inspection of
water use and waste water treatment according to our membership in Sweden Textile Water
Initiative (STWI).
During 2013 we are planning to conduct a FWF audit at one of our most important suppliers in
China and follow up CAP with our other suppliers through e-mail discussions and shorter
monitoring visits. We will also encourage the most important suppliers to join the workplace
training programme offered by FWF.
3.2. TURKEY
Turkey is currently our third largest production country based on order value. We work with
around 15 factories in the country. Some are new and while others suppliers that we have been
working with for many years. During 2012 we conducted two FWF audits at two important
suppliers, as well as six shorter monitoring visits and follow up audits together with a FWF
auditor.
One concern in Turkey is the use of unapproved and unregistered subcontractors. This has been
in focus during the monitoring activities of 2012, and we have learned more about our full
supply chain and discussed this in great detail with our suppliers and agents. As a result one
supplier will quit working with their subcontractor as the factory is unwilling to work according
to our Code of Labour Practices.
At two suppliers we have also experienced some reluctance of being audited, and we are still
discussing with the suppliers on the attitude they showed during the audits. One of these
suppliers also works with another FWF member and we have been cooperating with this brand
to find a solution. In 2013 FWF will conduct a verification audit at this supplier.
Furthermore, in 2013 we are planning to conduct an audit at our main denim supplier in Turkey,
as well as follow up on earlier audits.
3.3. ROMANIA
In Romania we are currently working with two factories, whereof one was audited for the first
time in 2012. In general it is a well-functioning factory and the audit showed few findings based
on our Code of Labour practices. For example the factory has a collective bargaining system in
place but quite low wages compared to living conditions in Romania.
3.4. ALBANIA
In 2012, we had production at four factories in Albania through an Italian agent. Two audits
were planned for the most important factories but they had to be postponed until 2013 due to
difficulties to find a suitable date for everyone involved. These audits are going to be conducted
by auditors from Fair Labour Association (FLA) as FWF does not have any audit teams in Albania.
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3.5. ITALY
Italy is our second largest production county based on order value. As it is classified as a low
risk-country we are not conducting any social audits there. However, in 2013 we are going to
participate in a training held by FWF on working conditions together with some of our Italian
suppliers.
3.6. OTHER
We only have production at one factory in Morocco. This factory is going to be audited for the
first time in 2013. In Lithuania we are working with several factories through an agent. As
Lithuania is classified as a low-risk country we are not conducting any social audits there. The
situation is the same for our production in Portugal, UK, France and South Korea. The factory
that we work with in Bulgaria in 2012 has been cancelled for 2013.
4. COMPLAINTS PROCEDURE
During 2012 there was no complaint reported from any of our suppliers. In case of any
complaints, it is handled by our CSR Manager who will take immediate action according to
recommendations from FWF.
Acnes Code of Labour practices, together with the phone number to the complaints handler,
must be posted on the walls in the factories. Acne ensures that this requirement is met through
e-mail conversations where a photo is attached, audits where this is inspected, and through
visits by other Acne employees where they will control this on behalf of the CSR Manager.
Information on the function of the complaints procedure is communicated during FWF audits by
the auditor responsible for worker interviews.
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7. STAKEHOLDER ENGAGEMENT
The problems related to sandblasting have been discussed with the Swedish NGO Fair Trade
Centre, as they were making a report on this topic during 2012.
Our CSR Manager is receiving information from various newsletters by stakeholders, for
example the China Labour Bulletin on current labour issues in China. The country studies that
FWF is offering are sometimes used before and after audits in specific countries.
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