Simone Cipriani, Andreas Kronthaler, Vivienne Westwood, Federico Marchetti at the launch of the Ethical Fashion Africa Collection | Source: ITC

FLORENCE, Italy — Simone Cipriani spearheads the Ethical Fashion initiative of The International Trade Centre (ITC), a joint agency of the United Nations and the World Trade Organisation. Connecting “the world’s most marginalised people to the top of fashion’s value chain for mutual benefit,” it enables communities of artisans and micro-manufacturers — the majority of them women — to thrive in association with the talents of the fashion world by fostering local creativity, enabling female employment, and promoting gender equality in order to reduce extreme poverty, according to a detailed brochure published by the ITC this month.

Of her recent collection with the Ethical Fashion Initiative, unveiled during Pitti Uomo last month and now available on Yoox.com, Vivienne Westwood said “it’s quite incredible to think that we might save the world through fashion.”

But ethical fashion remains a somewhat fuzzy, idealistic concept, which has proven difficult to implement in practice. It also remains a niche market, even if consumers are becoming more conscious about their purchasing habits and sales of ethical fashion are growing. According to Mr. Cipriani, its widespread adoption will require a wholesale mindset shift for the fashion industry, which must eliminate waste from a fashion system that remains bloated with excess product and underpays those at the very early stages of production.

Mr. Cipriani’s official title is typical of bureaucratic nomenclature: Head, Poor Communities & Trade Program, Chief Technical Advisor, Ethical Fashion. But make no mistake, this is no ivory-towered diplomat. Cipriani spends most of his time in the field — the slums of Nairobi and rural communities around Africa — laying the groundwork for ethical fashion at the front lines and building ties to fashion houses in Europe in order to make his vision a reality.

I caught up with Simone Cipriani on a quiet rooftop terrazza during one of his rare visits to his native Florence for the launch of Vivienne Westwood’s Ethical Fashion Africa collection.

BoF: There is a lot of debate about this term ‘ethical fashion.’ What does ethical fashion mean to you?

SC: I think ethical fashion is being responsible for people and for the planet. For the planet we know sustainability is the word of today, but sustainability is a very vague concept which came out after The Brundtland Report, so it’s a word which has been over used. Now we have to talk about something which is immediately understandable by people. It is about the place where we live, usable also by those who come after us and making it liveable, making it a place worth living in for those who are here today.

The social dimension is about extreme poverty and exclusion from the wealth of the world. The reality is that 30 percent of human kind lives in a way which is not sustainable. It is about the ethics of responsibility. We are responsible for it because if we change it, it becomes better also for us. It’s not an abstract responsibility it’s a very concrete one: I am responsible for it because I am responsible for my life, the quality of my life depends on that.

If we don’t address this extreme poverty and this exclusion of the path of the human kind in a few years time, the world, and parts of the world [will become] a very dangerous place to live in.

BoF: What does this mean for the fashion industry, and in particular for our culture of consumerism?

This ethic of responsibility is also something that has to be adopted by the fashion industry, because no product can be a product today unless it is responsible. Cars have to be hybrid. If I throw [out] the garbage I have to separate [it]. That is an obligation which is part of our life. If we want to live on this planet, we have to do it. It’s like drinking water, if I want to live I have to drink water otherwise I die. If I want to live on this planet today, in this condition, I have to be responsible in whatever I do, so all the products I produce have to be responsible because products are part of our life. We are a product of our products, we are the product of what we wear and what we produce.

This is ethics. Ethics of responsibility. Responsibility towards the place where we live. It’s only fair.

BoF: But ethical fashion also has to work as a business as well, right? Ethical fashion cannot just be idealistic. It has to be a product that people actually want to buy regardless of how it was made and it has to be commercially viable.

SC: Being responsible means being practical. A fashion product has to be gorgeous [in order to be sold], it has to be beautiful; it has to be within a certain margin or price, and so on. This is the bottom line. But then there is a new bottom line which is also responsible; responsible with a positive story which is how the value is built in the whole value chain.

In the value chain today — from the producer to the customer — the majority of the value lies in the last rings of the value chain, the biggest share of the pie — the retail margin — is there. We produce in Africa then it’s multiplied by 2.5 or 3.5, then it’s multiplied again and again, so $20 here, 20 euros here, becomes 180 there. Come on, justify that. It’s a huge spread. I know it’s justified by the fact that those who buy here have huge overheads and have to cover marketing costs, and the rejects, and then they also have the 40 percent, and the rest goes to outlets.

BoF: But it’s also because they don’t run their business smartly, right? They don’t buy things in a way…

SC: Bravo! Exactly, because of lack of responsibility on their side. In order to be sure that I make it, I don’t run the business in a very smart way, I just put a huge margin and whatever happens, I’m fine. It’s irresponsible, because those people [early in the value chain] cannot get enough to live.

In order for these people to get enough to live — because through this money they change their lives — we need these people to manage their businesses in a proper way, in a responsible way. Responsible also for their companies, because it’s business. If they do that, their margins remain big, always, but they minimise waste, [optimise] investment, allocate resources in a proper way. Why? Because they know that they have to give something back.

BoF: What will it take to get this message understood by fashion companies?

SC: At present they know that they don’t have to give anything back. The system through which you build the value in fashion is wrong. It is not about corporate management, because management is another thing. Management is about management, and is about being fair to people, first of all, then it’s about managing the market, then it’s about finance, but first it’s about managing people. How can you be responsible to people if you neglect what happens in the first stage of the value chain?

So, it’s about being profitable, otherwise you’re not sustainable and you’re not responsible to your stakeholders, shareholders. It’s about organising and allocating resources in such a way that this profit is also shared with the first stages. This is ethical fashion.

BoF: Who is leading the way in this regard?

SC: There are companies that [are making a good start]. Some companies start because of the inner motivation of the designers, such as Stella McCartney. People who are motivated inside, people who really have a deep, almost spiritual motivation.

But sometimes you deal with companies who do this — big distributors for instance like CO-OP Italia that does huge orders with us. They do it because they see the market changing, and realise if they don’t change their business model, they will remain out of the market. It forces everybody to work better; to maintain the same profit, but to share that in a different way.

BoF: When I walk into certain retailers in the UK or US and I see the prices at which products are being sold and the quality level at which things are being made, I can’t help but wonder, how could this have possibly been made in an ethical way? We’ve talked about smaller businesses, such as Stella McCartney and Vivienne Westwood, but isn’t the hugest potential impact at the mass consumer level, brands like Zara and H&M?

SM: We work with some big brands. We just became a supplier to Walmart, so we are going towards that, but you’re absolutely right.

There are two issues there, one is timing and one is money. Timing is always too squeezed. We develop this sample together now, it’s June, and I want to have the first delivery [in] mid-July. What does [that] mean? How can you think I don’t exploit people to do that, because people have to work over time, it’s impossible. Then at the same time, they say, this is what I pay in China.

But this is changing. First of all the cost of living is changing in China and the age of the cheap garment is finishing, that’s one point. The other point is that consumers are now aware. Yes, the majority of consumers want a t-shirt for $5 and that’s all. But there is a growing segment of of people who are affluent, who are able to pay $8 for that [same t-shirt] if you explain why they pay $8 and where this money is going. The only way is to communicate that to consumers, to enable consumers to see what it is about. If you don’t communicate to consumers it’s a problem and this is a fashion problem.

BoF: It sounds like you’re saying the biggest challenge we face is a mindset problem?

SC: It’s a mindset issue, and it’s all about management. What we are talking about is not a new kind [of management], it’s pure management. Manage your company well, according to what you study in the books. Because the thing is that people don’t do it; when we arrive at a company, we take shortcuts to be more profitable.

BoF: Tell me a bit about how you are trying to address these issues.

SC: Ethical Fashion Africa, the first hub created by the [ITC] to manage its business and support infrastructure in Kenya and Uganda, is completely self sustainable, with a sufficient number of customers from the industry and big distribution. Around EFAL (Ethical Fashion Africa Limited) there is a number of small enterprises and cooperatives, developed thanks to the support of the program. These companies are managed mainly by women and are working with the international market (especially through EFAL) but also on the domestic and regional markets. They include the work of around 7,000 people.

Some groups of micro producers, who are still evolving towards a more stable form of business organisation are still supported by the ITC through EFAL: at least 3,000 more people are involved in them. The communities where these companies operate have become peace and cooperation buffer zones, i.e. zones where peace and cooperation have replaced conflict and all violence and deprivation associated to poverty.

BoF: What would you like to have achieved in 5 years time?

SC: In 5 years time, the program will have expanded its operations also to Ghana, Burkina, Mali and I hope it is able to address the catastrophe of cotton, by creating perspectives of value addition in place. Soon I will provide a business and development perspective for that area of work as well as we shall start developing our business and support infrastructure in Ghana in the months of September 2011.

I think that, by diversifying the products and focusing on the specificities of these new regions (cotton, beautiful prints, natural dyes, weaving techniques, large creative potential) we shall achieve similar results. We have already done feasibility studies but now we have to start working.

In The Long View, BoF speaks to leading thinkers about their forward-looking visions for the fashion industry

Looks from the IOU project | Source: IOU

Ethical fashion weaves in social media (CNN)
“With each piece of clothing there is a link called “This item’s journey” that leads to pictures and profiles of the weaver who created the fabric and of the artisan who cut the material and created the design. Using the IOU Project’s iPhone app, you can take a photo of the QR code to pull that story up again.”

Luxury stores urge UK to issue more Chinese visas (CNN)
“Britain could give a boost to the luxury goods industry by relaxing visa restrictions for Chinese travellers, the bosses of high-end department stores Harrods and Harvey Nichols told Reuters…. Four years ago, China represented about a third of our American business, now it is four times our American business. ”

Luxury executive switcheroos (FT)
“Mr Bouissou’s move to PPR comes as its chief François-Henri Pinault has switched to a hands-on role with the luxury section of the business… Boucheron, the only jewellery brand in the portfolio, has always seemed a bit of an anomaly in the Gucci Group stable, but joined by a few other, smaller gem names – well, suddenly it starts to look a lot more logical.”

Why Saks Continues to be a Leader in Luxury Retail’s Recovery (Forbes)
“Look who’s leading a luxe charge in retail: Saks Inc. posted a soaring 51 percent gain in profits for its fiscal first quarter on… Despite the influence of consumer confidence, Saks’ sales gains of 8.8 percent to $726 million on a 10.2 percent rise in comps (comparable sales in stores open at least one year) were the result of savvy management decisions.”

Yohji Yamamoto as Himself (WWD)
“As a buildup to his 10-year anniversary with Adidas, Yohji Yamamoto has stripped down the way he works in a new documentary. Compelling as it is to see how closely the designer examines the drape of his designs and how he crouches on the floor to review rows of models’ head shots, the film’s most poignant moments happen when Yamamoto simply stands in front of the camera, speaking about his life and ideology.”

NEW YORK, United States — Over the past ten years, the eco-fashion movement has been gathering steam. Following the lead of pioneering brands like Stella McCartney and NOIR, which were founded on the basis of ethical principles near the turn of the millennium, there are now entire fashion exhibitions, forums and blogs all focused on so-called sustainable fashion.

Ethical fashion is also high on the agenda of the major luxury goods groups. In April 2009, having already partnered with Stella McCartney to launch her eponymous label, PPR announced its support of HOME, an environmental call-to-action by filmmaker Yann Arthus-Bertrand. François-Henri Pinault, chairman and chief executive officer, said at the time that PPR’s support aimed to use “images and commentary to make us understand that each of us has a responsibility towards the planet, and that we can each act in our own way.”

A month earlier, Bernard Arnault, chairman and chief executive of LVMH, told investors at the luxury group’s annual shareholders meeting in Paris of his plan to take a 49 percent stake in Edun, the sustainable clothing label founded by Bono and Ali Hewson. “LVMH shares the vision and ethical values of Edun, a pioneer in ethical apparel, and its founders,” he said later. “LVMH is committed to advancing both the social and environmental aspects of sustainable development, which plays an intrinsic role in the development of our brands.”

WHAT IT MEANS TO BE GREEN

In the food industry, we have witnessed the rise of certifications like “organic” and “fair trade” and their widespread adoption by affluent consumers. But what exactly do words like “sustainable,” “eco,” “ethical,” and “green” mean in a fashion context?

Earlier this year, in an insightful piece for the Financial Times, Vanessa Friedman identified a complete lack of consensus within the industry: “Having spent two days in Copenhagen immersed in the concept, having thought about it over the weeks since then, and having canvassed a wide variety of fashion figures, I can honestly answer … no one knows,” she wrote.

Ms. Friedman was in Copenhagen to attend a sustainable fashion conference which coincided with the UN climate change conference and spoke to a number of leading industry figures like Gucci’s Frida Giannini, Oscar de la Renta and Dries van Noten, a perfect focus group, you would think. Yet each of them had a different response to her question: “How would you define sustainable fashion?” Some emphasized a commitment to traditional techniques, others pointed to locally sourced materials, while still others mentioned the importance of reducing carbon footprint.

Industry-observing bloggers don’t fare much better in providing a cohesive answer. On the blog which accompanies sustainable fashion initiative The Uniform Project, co-founder Eliza Starbuck (who has since parted ways with the project to start her own line) wrote an especially thorough post which tried to clear up the confusion.

In the post, Ms. Starbuck distinguished between “heirloom sustainability” — the school that basically says nothing is more sustainable than a high-end designer item, say an Hermès belt, that is passed on for generations — and what could be dubbed “artisanal sustainability,” which is defined by handmade production and a low carbon footprint, the sartorial equivalent of the locavore movement among foodies.

In the end, however, Starbuck concludes that “there is still no ‘sustain-a-standard’ yardstick” that will cover all bases. After all, what are we sustaining? The environment? Traditions? Labourers? Change the parameters and the definition of sustainable fashion changes dramatically.

Commenting on the issue for this article, Christian Kemp-Griffin, chief mission officer at Edun, agreed that there is no single, definitive answer to what is ultimately a very complex question and that the best companies can do is strive for ethical progress and accountability, not ethical perfection.

Summing up Edun’s credo, he explained: “Ethical companies make thoughtful decisions and sell product thinking about the people who make the clothes — wages, human rights, health and safety — and the planet — energy use, biodiversity, organic — which boils the definition of sustainable, ethical clothes down to: product that benefits people and the planet.”

But rather than looking for a single formula, perhaps what is most important is that ethical and sustainable fashion brands are clear on what they are promising. As long as brands stay true to this commitment, they uphold the ethical values that are most important to them and their consumers. The more transparency brands can offer in their sourcing, manufacturing, and design processes, the more consumers can judge for themselves whether the promises being made are really being fulfilled.

In high-fashion, Stella McCartney is, without a doubt, the brand most closely associated with a commitment to the environment. The label’s famously vegetarian, farm-raised founder and designer very openly made planet-friendly practices a foundation of her company right from the start. Part of what makes her proposition so compelling is that her firm stance against cruelty to animals lies at the heart of everything her company stands for.

But is it 100% ethical, in the broadest sense of the definition? Probably not. Does this matter to her fans and customers? Probably not. What’s most important to them is that they know what she is promising and what they are getting when they buy a Stella McCartney product.

DOES SUSTAINABILITY SELL?

Definitions and good intentions aside, fashion is a business built on desirability — people buy fashion because they covet what it looks like and represents. So an equally interesting question is whether “Made Ethically” has the same effect as “Made in Italy.” In other words, is sustainability a positive differentiator in the eyes of fickle and demanding fashion consumers?

Stella McCartney became known as a chic designer label that’s convincingly green, not as a green designer label that is convincingly chic. Speaking to The Business of Fashion, McCartney was clear about her priorities: “Obviously, I don’t use any animals which has a huge impact on the planet. But my first job is to make desirable, luxurious, beautiful clothing for women to want to buy. Then I ask myself: can I do this in a more environmental way without sacrificing design? If I can, then there is no reason not to. I think that women buy my product because they like how it looks, feels, fits and being sustainable is an added extra bonus.”

This emphasis on desirability and design may come as no surprise from a graduate of London fashion college Central St. Martins. But interestingly Ali Hewson, who founded Edun primarily as a means to do good, sees it no differently. She told BoF: “In the fashion business desirability is sustainability! This point has taught us over the years that we must produce quality clothes. Fit must be right, design details correct.”

Julie Gilhart, influential fashion director at Barneys New York, and an early proponent of sustainable fashion, sums it up bluntly: “Consumers respond to good design. Design and desirability must come first.” When deciding whether to spend on fashion, the consumer looks, above all, for good design. Ecological or ethical considerations are still very much secondary.

To illustrate the point, Gilhart recounts an empirical lesson: “At Barneys, when we explicitly labeled Stella McCartney’s organic line with the word ‘organic’ its perceived value actually went down in the eyes of the consumer, even though it was actually more expensive to produce.”

There’s little doubt that environmental awareness amongst fashion consumers is rising and that greater transparency will become important for more and more brands. But in fashion, sustainability cannot drive sales without desirability.

Indeed, the brands that will resonate most with increasingly aware, but ever-demanding consumers will be the ones who integrate sustainable principles into their operations without making “being green” their defining principle.

Suleman Anaya is a contributing editor at The Business of Fashion

Dries Van Noten, courtesy of IHT

It’s day two of the BoF India Fashion Week and today we turn our attention to Sustainable Luxury, the theme of the most recent IHT Luxury Conference, held this year in India, home of age-old craftsmanship and artisanale traditions.

NEW DELHI, India — “What does an economic collapse and a terrorist attack have to do with sustainable luxury?” Everything, strategist and author Jem Bendell suggested as he addressed the attendees of the International Herald Tribune’s annual conference on Luxury held last week.

The event was re-scheduled from December of last year, due to the 26/11 attacks on Mumbai. The topic for this year’s conference was Sustainable Luxury—a phrase whose meaning has expanded to include more than just corporate social responsibility (CSR). The global economic downturn has precipitated a major shift in both consumer behaviour and expectations, affecting the bottom line of many luxury brands and calling into question the sustainability of the sector itself.

As Suzy Menkes, Fashion Editor of the IHT, noted in her opening address, “these are tough, rough times in the luxury world… and those sensitive to the shifting mood doubt that the 15 years of expansive growth can return in the same heady, crazy way”.

The notion of sustainable luxury today must be defined by more than just how the sector conducts business in relation to its environmental and social impact. It must also consider the ongoing relevance of an industry that for many exemplifies the type of rabid consumption and extravagant spending that, in part, gave rise to the current economic crisis in the first place.

So, gathered together was a group of leading industry professionals with the common goal of imagining what luxury, sustainability and India have to do with each other. François Henri Pinault spoke at length about the efforts PPR has been making to decrease the environmental impact of their businesses, including logistics, transportation and packaging optimization. Gucci’s leather goods and jewellery divisions are SA8000 certified and as CEO, Pinault has linked CSR targets directly to management compensation throughout the PPR organization. Although much of his talk came across like a textbook presentation on CSR, the work being done is commendable and undoubtedly a step in the right direction.

Christian Blanckaert, Executive Vice-President of Hermès International, took the opportunity to declare the end of “pop luxury”. A long-time proponent of signature over brand, Blanckaert asserted that the current economic crisis and resulting adjustment in consumer behaviour would swing the pendulum back towards “deep luxury”—true luxury, which is not fast and has little to do with fashion.

The manufacturing of these kinds of goods requires a high level of quality and craftsmanship which results in long term partnerships with suppliers and workers, encouraging economic sustainability for all those involved. Searching for value, the consumer will continue to spend on products that are perceived as investments. If the steady sales at Hermès for the past three quarters amidst plummeting performances elsewhere in the sector are any indication, other brands would be wise to take note.

Mohan Murjani, Chairman of the Murjani Group, outlined in no uncertain terms the reasons for the recent termination of his Indian franchise agreements with brands such as Gucci and Bottega Veneta. In addition to a massive disparity between initial projections and actual numbers in matters of sales, margins, markdowns and costs, Murjani suggested that the challenges of the Indian consumer were grossly underestimated.

This discussion was the first of many throughout the conference that stressed the highly value-conscious nature of the Indian consumer. Not to be misunderstood for simple price point sensitivity-affluent Indians certainly have the money to spend-but a real evaluation of the quality, craftsmanship and uniqueness of the offering has been the trend with shoppers here. In a country that has been developing embroidery techniques, harvesting gemstones, creating fabrics and inventing dyes for thousands of years, it is hardly a surprise that ‘value’ is held to such high standards.

Charu Sachdev, CEO of TSG International Marketing and Indian franchisee of brands such as Lanvin and Stella McCartney, argued another element was at play, contributing to the purchasing barrier Indians are experiencing when shopping on home turf. Acute poverty, still very much a reality in India is harder to ignore when not in Paris or Dubai. The relationship between potentially excessive consumer behaviour and social responsibility is more likely to come to the forefront of a shopper’s mind when you drive past a slum on your way to a glossy, new luxury shopping complex.

The solution? Building a business model that moves beyond the “no harm” notion of responsibility to that of positive engagement and long-term sustainability will go a long way in re-enforcing the positioning of luxury brands. Luxury brands must make sure their definition of excellence is in line with that of their increasingly conscientious consumers. Designer Dries Van Noten, who spoke of his 20-year relationship with a Kolkata embroidery atelier has the right idea when it comes to building a long-term relationship with the Indian marketplace and providing shoppers incentive to buy.

The difficulties luxury brands have been facing in India typify those that they will face on a global scale as a result of new economic realities and altered consumer expectations. The value proposition of a product will have to satisfy a greater number of discerning, quality-hungry customers looking to make a real investment. The days of disposable luxury are over. In addition, those who are still spending will want to make sure their purchases contribute somehow towards a greater environmental, economic and social sustainability.

Shrinking economies and terrorist attacks only serve to remind us how connected we really are, making sustainability an issue the luxury sector can no longer afford to ignore.

Meeta Roy is a luxury brand consultant based in Paris.