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Adidas, Activism and Fake News

This week, a spoof press release claimed Adidas had appointed a co-CEO to address rights violations in its supply chain, a sign of more disruptive and confrontational tactics from advocacy groups focused on the industry.
Workers’ rights campaigners staged a fake Adidas fashion show during Berlin fashion week to draw attention to alleged rights violations in the brand’s supply chain.
Workers’ rights campaigners staged a fake Adidas fashion show during Berlin fashion week to draw attention to alleged rights violations in the brand’s supply chain. (Keil Troisi)
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On Monday, an announcement that Adidas was radically restructuring its leadership dropped into reporters’ inboxes. In a startling move, the German sportswear giant appeared to have appointed a former Cambodian garment worker and union leader to serve as its co-CEO and oversee efforts to ensure ethical manufacturing practices.

The press release wasn’t real. It was sent from a fake Adidas email address by stunt activists The Yes Men and labour rights group Clean Clothes Campaign, part of an elaborate hoax that also included a “derelicte”-style fashion show during Berlin fashion week. Several fashion news outlets and blogs fell prey to the stunt, speeding to report the story before it became clear the announcement was fake.

The goal of the whole thing was to draw attention to alleged rights violations in Adidas’ supply chain and pressure the sportswear company to address them.

The stunt is part of an escalating wave of disruptive, confrontational and sometimes controversial activism — from soup throwing to traffic stopping — fuelled by a growing sense of frustration and anxiety over inaction on increasingly urgent topics like climate and social justice.

Fashion is far from exempt. Activism in the space has been growing since before the pandemic, alongside increased awareness of the industry’s negative environmental impact. Covid-19 leant a dark momentum to labour advocacy in the sector, as pressure on workers grew and incidents of wage theft and union busting increased.

Campaigners say new tactics are needed because nothing has changed, and things are getting worse.

“This is a life and death issue,” said Ilana Winterstein, urgent appeals campaigner at Clean Clothes Campaign. “We need to resort to tactics that really take people by surprise and say, ‘This is the reality. You can’t ignore it any more.’”

To be sure, the impact of such initiatives is rarely as explosive as the headlines they generate — systemic change is never fast or simple. But such punchy tactics can help shift the popular narrative, set the agenda for action and boost momentum for ongoing campaigns.

Beyond publicity, Clean Clothes Campaign is angling to pressure Adidas into signing a binding agreement that would commit the brand to address wage theft in the industry and protect workers’ right to form a union. The proposed Pay Your Workers agreement is widely supported by labour groups and unions, but a major brand has yet to sign it.

Adidas denied allegations of union busting and wage theft in its supply chain and said it has established standards and monitoring processes to ensure fair and safe working conditions in the factories it works with.

The spotlight on the brand comes at an awkward time, with former Puma CEO Bjorn Gulden just starting his tenure with a mandate to restore the company’s fortunes and reputation after a bruising breakup with long-time collaborator Ye (formerly known as Kanye West) and setbacks in the key Chinese market. Investors seemed unconcerned by this week’s hoax, with the company’s share price closing slightly up the day it made headlines.

Nonetheless, the industry will likely need to brace itself for more creative and hard-hitting efforts to drive accountability around its environmental and social impact. Regulation is also adding new tools to campaigners’ arsenals, raising the prospect that advocacy groups could bring legal action against brands.

Winterstein was coy about what else Clean Clothes Campaign may have planned.

“I can confirm it doesn’t end here,” she said. “The plan is to continue calling on all brands to take workers’ rights seriously, and continue using all methods available to raise the pressure.”

THE NEWS IN BRIEF

FASHION, BUSINESS AND THE ECONOMY

The exterior of a Cartier store in London. Store signs are shown above the door and on a red flag hanging outside.

Richemont, Burberry say China sales slumped amid Covid surge. Richemont’s revenue from China plunged 24 percent last quarter, while Burberry’s comparable sales fell 23 percent in that crucial market, the companies said Wednesday. Both said sales grew elsewhere but struggled to make up for the slump.

Report: Shein in talks to raise funds at lower valuation of $64 billion. The latest valuation would be nearly 36 percent less than the $100 billion the company was reportedly valued at in a funding round last year.

US holiday sales miss estimates as inflation weighs on demand. The National Retail Federation said holiday sales, which are not adjusted for inflation, jumped to $936.3 billion during November and December. It had previously forecast a rise between 6 percent and 8 percent over 2021 to between $942.6 billion and $960.4 billion.

THG warns on profit after major revenue miss. The British group, which owns beauty and nutrition brands, said it expected to report adjusted core earnings of £70-80 million for 2022, compared with its forecast in October of between £100 million and £130 million.

P&G relies on price hikes to prop up sales as volumes shrink. The total volume of goods sold fell 6 percent in the three months ended in December, worse than the 2.6 percent decline that analysts had estimated.

Nordstrom cuts annual profit outlook as off-price rack sales fall. Nordstrom Inc slashed its annual profit forecast after heavy discounting failed to sway people shopping at its off-price Rack stores, leading to weak holiday sales and pushing its shares down 6 percent in after-hours trading on Thursday. The company said it now expected annual revenue growth to be at the low end of its previous expectation of 5 percent to 7 percent.

UK retail sales had worst year on record in spending squeeze. UK retail sales fell unexpectedly last month, capping the worst year on record after a cost-of-living squeeze forced consumers to pay more for fewer goods. The volume of goods purchased fell 5.8 percent from a year ago, the sharpest December decline since records began in 1997, the Office for National Statistics said Friday, more than the 4 percent drop economists had expected.

Dr. Martens warns on profit, shares slide more than 20 percent. British bootmaker Dr. Martens Plc issued a profit warning on Thursday, citing significant operational issues at its new distribution centre in the United States that sent its shares plunging by more than a fifth.

Bode launches womenswear. The craft-centric American brand designed by Emily Adams Bode Aujla will present its first women’s collection at its Paris menswear show on Jan. 21, reported Vogue.

J.Crew launches resale site. In partnership with ThredUp, the American retailer now offers customers a way to buy and sell pre-worn J.Crew products online, the company announced Tuesday.

Vivienne Westwood’s foundation launches. The Vivienne Foundation, a non-profit company first established by the late fashion designer in 2019, launched this week following Westwood’s death in late December.

Met Gala announces co-chairs and dress code. Actress and screenwriter Micaela Coel, actress Penélope Cruz, tennis legend Roger Federer and pop star Dua Lipa will serve as co-chairs alongside Anna Wintour for the gala surrounding this year’s exhibition: “Karl Lagerfeld: A Line of Beauty.” The dress code is “In honour of Karl.”

THE BUSINESS OF BEAUTY

Makeup by Mario has received a $40 million minority investment from private equity, valuing the brand at over $200 million.

Makeup by Mario secures minority investment at $200 million valuation. Provenance and Silas Capital took a minority stake in Mario Dedivanovic’s Makeup by Mario, valuing the brand at over $200 million.

Top beauty brands’ climate commitments lack credibility, says report. The world’s biggest beauty companies aren’t doing enough to tackle their emissions, according to a new report by climate consultancy the Carbon Trust’s Net Zero Intelligence Unit.

PEOPLE

Elizabeth Von Der Goltz has been named chief commercial officer of MatchesFashion. Photo: Getty.

Elizabeth Von Der Goltz joins Farfetch in executive shuffle. The former Matches chief commercial officer has joined the executive team at Farfetch as chief fashion and merchandising officer. She will also take the reins at Browns, becoming chief executive of the Farfetch-owned, London-based luxury retailer.

Neiman Marcus names chief brand officer and chief retail officer. Nabil Aliffi and Stefanie Tsen Ward have been appointed to the newly created roles of chief brand officer and chief retail officer, respectively, the US luxury retailer said in a statement Monday.

MEDIA AND TECHNOLOGY

Ziliango to liquidate after complaints of financial irregularities, culminating in the dismissal of high-profile co-founder and CEO Ankiti Bose in May.

Singapore’s Zilingo to liquidate after crisis at fashion start-up. Zilingo Pte is set to enter liquidation, capping a months-long crisis that shocked Asia’s technology and start-up industries. The once high-flying company pitched into a downward spiral after complaints of financial irregularities, culminating in the dismissal of high-profile co-founder and CEO Ankiti Bose in May.

Digital fashion platform founded by ex-luxury executive raises $9.5 million. Syky, created by a fashion veteran who held top roles at Ralph Lauren and Burberry, closed a funding round led by Seven Seven Six, the venture fund of Reddit cofounder Alexis Ohanian.

Compiled by Joan Kennedy.

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