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March 19, 2010

 

Zara: Demand Driven Child Exploitation

Zara, the mostly vertically integrated retailer famous just as much for its supply chain as its fashionable threads, can now add another credit to its list of accomplishments: child labor exploitation (credit for the title and the hat-tip, by the way, goes to Pierre Mitchell). According to an article I just read, "The Spanish fashion chain Zara's parent company Inditex, had started an investigation into the "extremely grave" accusation that one of its sub-contractors is paying the children 20 cents to sew the interior of 50 pairs [of shoes] a day ... Children are being employed by the sub-contractor to make the shoes in Felgueiras, a depressed area where many textile factories have closed in recent years, stated a report." Zara is more famous for its fast, nimble supply chain than its choice in cheap labor. Perhaps this is how they can afford to air freight shipments to stores worldwide -- which they have been known to do.

- Jason Busch

Comments
I seriously hope this story isn't true. Zara has been a wonderful supply chain success story and an inspiration to companies everywhere. But if child exploitation is one of its strategies, then Zara certainly deserves the bad press it is currently getting. Looks like H&M might have a good opportunity here.
# Posted By Lisa Reisman | 6/13/06 7:35 PM
From a Spend Management perspective in the home, I'm sure that your spouse would appreciate it if you frequented H&M rather than stores like Zara. Just a thought ;-)
# Posted By Jason Busch | 6/13/06 7:48 PM
And here I thought you knew the difference! The analogy would have been more effective if it were between Saks and H&M (encouraing the latter). But most would agree, H&M and Zara are pretty interchangeable from a pricing standpoint.
:)
# Posted By Lisa Reisman | 6/13/06 7:51 PM
Hey Jason, are you in H&M payroll? BTW, if you read well, it says that the one that may employ child labour is a sub-contractor, not Zara itself, whom I am pretty sure try to audit their sub-contractors as much as they can. Besides, Zara produces more than 50% of their output in Spain and Portugal, where I am sure working practices are better than in China and salaries way higher. (H&M manufactures all of their garments in China for your info)
# Posted By J Aguilar | 9/12/06 8:34 AM
If you do not believe that ZARA's strategy is based in chlid labour you must believe it is, to some extent, based in the exploitation of its workers.

I was an employee of ZARA in the Netherlands, even in a country like this, where supposedly that cannot occur, the exploitation of workers takes place:

They do not pay the breaks nor the extra hours I worked, in seven hours of labour i could only get 15 minutes break, I was obligued to work in days such as 31st December and so on.
I had no rights whatsoever even though they were stipulated on my contract and what is even worse, most managers who are in charge are ignorant and sometimes mean. But what I found the most worse of all is that even on a day like the 31st one had to work just so that alienated consumers could buy what they do not even need.

We do not need cheap products what we need is a high conciousness, one cannot accept to be dressed and fed by means of exploted workers and meanly killed animals.
# Posted By Heliana | 10/28/06 5:45 PM
And J. Aguilar have looked at the label on the Zara's clothes? Most of it is produced either in China, Banglsdesh, Turkey and so the list goes on. Multinationals cannot be good because the principle by which they produce their profit is unhuman. For the multinationals mankind is of service to the economy and not otherwise.
# Posted By Heliana | 10/28/06 5:57 PM
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