More than ever, it seems that the U.S. is obsessed with ethics, accountability, and social responsibility. The 2016 election has generated a host of rapid-fire—and incredibly passionate—public accusations labeling candidates as criminal, crooked, dangerous, and ignorant. All demonstrate the American public’s demand for transparency and accountability from their leaders. But can the same be said for the U.S. business community? And if so, how will the business of fashion be affected by the strong ethical or social responsibility standards?
Ethics in fashion covers a broad array of issues, ranging from defending fair wages to developing eco-friendly fabrics to animal rights. Two of the most notable fashion brands in the lead on the issue of ethical standards are American Apparel and Toms.
American Apparel is credited with pioneering the Made in USA sweatshop—free model of transparency, fair wages, and a refusal to outsource manufacturing. Toms, a runaway success, is another “gold standard” of a socially relevant fashion business that practically created the one-for-one model by donating one pair of shoes for every pair purchased. Both were once on top of the industry style and finance hot lists, but now both are struggling to sustain profitability. So, this raises big questions about the relevance of social responsibility and ethics and whether or not it helps create a long lasting, successful fashion business.
As barriers to enter the fashion landscape continue to be very low, it seems like anyone with some good ideas, good connections or a notable name can establish a fashion LLC and launch a product line. But do they have the design chops to build something unique that can succeed as a lifestyle brand? One approach that some savvy new brands have embraced, taking a cue from Toms and American Apparel, is launching with similar ethical stories that can help garner some exciting, “stand out from the crowd” attention. But, it’s important for the new guys to keep one thing in mind: fashion is and always has been about very clear fundamentals and a sustainable growth strategy.
More and more brands have socially responsible elements to them, but it has to be natural and authentic to the story. “Many people think they are designers, and a social aspect is an element that can help them stand out from the crowd initially,” says Ilya Seglin, managing director of Threadstone, merger-and-acquisition advisory firm within retail and fashion. “But to sustain the business, you have to go back to the basics of being a fashion business—the product has to be right, the materials have to be of quality, the design has to be on trend. You can’t get away from the basics and just lean on the social aspect.”
When financial and capital-raising firms like Threadstone Partners look at emerging fashion brands to invest in, an ethical slant doesn’t necessarily translate directly into valuation. According to Seglin, “Growth comes faster because you are more visible for these reasons, but if you don’t have a plan and you can’t execute behind that plan of building a lifestyle brand, then the product plays out and then what?”
The industry has been watching how both American Apparel and Toms played out over recent years, and as new men’s brands launch, it will be interesting to see how those businesses leverage the ethics angle to help build a sustainable and scalable brand.
Let’s look at two new men’s brands that are trying to make a name for themselves in a crowded landscape even as they simultaneously try to put their own unique spin on socially responsible efforts.
Jonathan Horemans and Javier Goggins Campos launched Galet, a French luxury men’s loafer brand, in 2014 with the intention of shaking things up in the men’s shoe category. “Everyone is wearing the same type of shoe,” Horemans says. “Men need a ‘freshen up’ and at a price point that allows guys to switch it up.” Galet now offers 10 different collections, including Casual, Riviera, Gala, and, most recently, its Conservation Collection, which features faux exotic hides from Italian leather. The idea is to spare actual exotic wildlife, for while the co-founders have never been outspoken about ethics, they are convinced that the industry needs to be more environmentally accountable.
One early decision they made was about the packaging: They designed their shoe boxes so customers could re-use them to store socks or other personal items. “On a personal level, we see the waste,” says Goggins Campos. “It makes me feel better to design products that not only look good, but also starts us in the right direction.”
Billing itself as a classic yet playful luxury brand, Galet prides itself on its craftsmanship, using traditional techniques to offer guys high style at competitive prices. As the young brand plans its expansion to New York City, Campos says, “Every collection is exciting for us, but the Conservation Collection helps to improve the system, but still offer things we want and like.”
David Fin, a new neck tie brand launched by David Herzka in 2015, aims to offer men a fine quality tie at an affordable price. To do that, he began by building relationships in Como, Italy, with the same designers and weavers responsible for fabric used by such brands as Brioni, Ferragamo, and Zegna. “We then hand make everything in NYC,” he says, “and sell directly to the consumer, which enables us to be the only ‘Made in the USA’ tie brand at this quality and price.” David Fin has also made social consciousness a big part of its story by partnering with the Folded Flag Foundation, which helps fund education for children who lost a parent in combat. Herzka was inspired to help returning veterans and their families by a friend who recently returned from Afghanistan and shared the hardships of transitioning military families. “I saw a strong connection between putting on a tie for work each day and helping veterans find employment,” says the founder. “During our first year, we focused on helping vets seeking employment and recently we partnered up with the Folded Flag Foundation.”
David Fin donates $5 from every full-priced tie (prices range from $95-$125) sold online to the Folded Flag Foundation. And the company recently announced a special initiative for its pop-up shop in November-December at John Allan’s midtown salon, where each purchase will result in a $10 donation to help fund $10,000 toward the college education of Madison Marcum, whose Navy Seal father was killed in combat when she was 8 years old. Herzka says, “A lot of our clientele is used to shopping on Madison Avenue, which doesn’t typically involve charitable giveback, so this is something refreshing to them, which they would like to see happening from more brands.”
It may be too early to tell if the ethical components of these two new companies will positively affect their bottom lines. But it seems inarguable that corporate social responsibility will continue to grow as the millennial generation rises through the fashion ranks.
“It’s always been fashionable to be ethical,” says Jeffrey Taylor, a recent fashion graduate of the Savannah College of Art & Design (SCAD) and the winner of the 2016 Supima Design Competition. Ethics was a main focus in the fashion program at SCAD, and Taylor is confident that this is not a trend, but instead the way he plans on doing business. “I think ethics crosses generations,” he says. “It is truly timeless and the millennials that intend on sticking around in the industry know that.”