As part of our latest Special Edition, BoF has produced a series of video articles with entrepreneurs and business owners on how to build a responsible business. Hear from The Rebel, The Upcycler, The Anti-Consumptionist, The Manufacturer and The Social Good Brand and explore the Special Edition here.
TORONTO, Canada — For brands, it has always been cool to be charitable. Amid a global health crisis, launching philanthropic initiatives has become an industry-wide imperative. But few businesses can say that their charitable commitments have boosted the bottom line.
Canadian basics brand Kotn, based in Toronto, is one of them. “Being a responsible business, if anything, has given us an advantage through this,” said Rami Helali, co-founder and chief executive.
The certified B Corp’s charitable initiatives include building schools for its cotton farmers’ children in Egypt. “It's given us a purpose [and] a cause to rally around, both from our internal team’s perspective and our customer’s perspective,” Helali told BoF over a Zoom call.
According to Co-Founder and Chief Brand Officer Mackenzie Yeates, Kotn’s close relationship with — and granular knowledge of — the brand’s suppliers in Egypt proved invaluable as other brands’ convoluted supply chains ground to a halt. “It's been easy to make decisions about supporting those communities and putting our money towards that,” Yeates said.
For Kotn, the pandemic has highlighted the ethical and financial value of decisions that would, for many, otherwise seem bad for business. Here’s what the team has learned during the crisis.
Your business can only be as strong as your team. Helali’s first priority when the situation worsened was to protect Kotn’s employees and partners in Canada and Egypt — managing the latter was the brand’s biggest challenge. “They don't really have the luxury of working from home. There is no safety net built in by the government. There is no infrastructure to support that,” he told BoF. “So we've had to work on a case by case basis with every facility.”
Purpose can’t be an afterthought. The crisis has forced Kotn to focus on its core, transparency, which in turn enabled it to adapt fast. “Having a completely transparent supply chain and the ability to contact every single person in our supply chain within 24 hours of [the news] breaking meant we had no ambiguity, no uncertainty,” Yeates said. Years of long-term investment into building and developing those direct supplier relationships had paid off. “We make sure that [our suppliers and the environment are] not an add-on to decision-making. [They’re] part of the decision-making matrix,” said Helali.
Purpose puts things in perspective. Helali estimated that it may take a year to 18 months before Kotn sees any true normalisation in physical retail, which it shut down early. “It wasn’t an easy decision but it was an easy decision to choose the wellbeing of our team over any potential harm,” he said. Though Quebec’s lockdown was controversially lifted on May 11 as infections climbed, the team decided to stay shut and err on the side of caution.
Purpose-driven companies shouldn’t shy away from growth. “You have to make it a real business,” said Kotn’s Co-Founder and Chief Digital Officer Benjamin Sehl. The team knew that its north star — to change the way garments are made across the industry — can’t happen without growth and impact. While Kotn remains a small business, impact won’t always be down to sales. In November H&M flew the trio to Sweden to meet with its sustainability team. “What we can signal to the market... is greater than what we can do in absolute,” Sehl said.
What doesn’t seem rational or profitable at first glance can generate goodwill, build capability and enable greater scale down the road. One percent of Kotn’s revenues and one-off campaigns have gone into its education programme — last year for Black Friday, 100 percent of the company’s sales ($80,000) went towards the cause. Subsidies, agricultural consultants and guaranteed pricing for farming partners have also added up over the years. “A number of the things that we do don't give us profits today, but they do help build community and show that we're putting our money where our mouth is,” said Sehl.
Empathetic marketing exists. Yeates knew from the get-go that it wouldn’t be business as usual for Kotn’s followers. “We know that a lot of customers aren’t doing masks and drinking green juice in big mansions... our customers are potentially struggling through this time,” she said. Kotn opted for marketing campaigns that would provide silver linings for homebound followers and foster goodwill, from a DIY natural dye walk-through to allowing followers to gift a product to two friends — Kotn’s way of shedding inventory without discounting.
Small can be powerful. “We were set up for success in this sort of situation because problem-solving mode is our natural state,” said Yeates. “We’re always getting scrappy with the money that we have and we were able to pivot on short notice and start coming up with new ideas and just make those things happen on our own.”