D. Codes of Conduct of the Largest U.S. Retailers and Manufacturers of Apparel
1.Survey of U.S. Retailers and Manufacturers of Apparel
In order to gather information on the extent and implementation of U.S.
garment importers' codes of conduct containing child labor provisions, the
Department of Labor conducted a voluntary survey of the largest U.S. retailers
and apparel manufacturers, based on 1995 annual sales figures.58 The companies included in the
survey were chosen on the basis of public annual sales data obtained from Kurt
Salmon Associates (KSA), a consulting firm specializing in retailing, apparel,
textiles, and other consumer products.59
A questionnaire on import sourcing and child labor policies was sent to the
48 U.S. retailers and manufacturers of apparel listed in Box II-1. (See
Appendix B for a copy of the questionnaire.) Survey recipients included the
largest companies in the following categories: apparel manufacturers, department
stores, mass merchandisers, specialty stores, and non-store direct marketers
(mail order and electronic home shopping). This chapter's analysis of codes of
conduct is based primarily on information voluntarily provided by the companies
BOX II - 1
Top Retailers & Apparel Manufacturers
|1. Sara Lee Corporation
|2. Levi Strauss & Co.
|3. VF Corporation
|4. Fruit of the Loom
|5. Liz Claiborne
|6. Phillips-Van Heusen
|7. Kellwood Company
|8. Russell Corporation
|9. Warnaco Group
||$ 916 million|
|10. Nike, Inc.
||$ 897 million|
|11. Jones Apparel Group
||$ 776 million|
|12. Oxford Industries
||$ 657 million|
|13. Hartmarx Corporation
||$ 595 million|
|14. Tultex Corporation
||$ 585 million|
|15. Salant Corporation
||$ 501 million|
|1. Sears Roebuck & Company
|2. JCPenney Company
|3. Federated Department Stores
|4. May Department Stores
|5. Montgomery Ward Holding Company
||$ 7.085 billion|
|6. Dillard Department Stores
||$ 5.918 billion|
||$ 4.113 billion|
|8. Mercantile Stores Company
||$ 2.944 billion|
|9. Kohl's Corporation
||$ 1.926 billion|
|10. Neiman Marcus Group
||$ 1.888 billion|
|1. Wal-Mart Stores
|2. Kmart Corporation
|3. Dayton Hudson Corporation
|5. Waban Inc.
||$ 3.978 billion|
|6. Ames Department Stores
||$ 2.120 billion|
|7. Venture Stores
||$ 1.929 billion|
|8. Shopko Stores
||$ 1.853 billion|
|9. Dollar General Corporation
||$ 1.764 billion|
|10. Family Dollar Stores
||$ 1.547 billion|
|1. Woolworth Corporation
|2. The Limited
|3. The Marmaxx Group
|4. The Gap
|5. Burlington Coat Factory
|6. Ross Stores, Inc.
|7. The Talbots, Inc.
||$ 981 million|
|8. Stage Stores, Inc.
||$ 683 million|
|9. County Seat Stores, Inc.
||$ 619 million|
|10. The Dress Barn, Inc.
||$ 501 million|
Non-Store/Direct Apparel Marketers
|1. Spiegel, Inc.
|2. Home Shopping Network, Inc.
|3. Land's End, Inc.
(Source: Kurt Salmon Associates, Financial Profile for Fiscal Year 1995,
2. Survey Response
Forty-five companies responded to the survey.60 Of the 45 responses, 42 were
reportable because three companies regard all information provided as
Many respondents indicated that they are significant importers - some
importing more than half of the merchandise they sell - while others said that
their dependence on imports was much lower, in some cases less than 10 percent.
Nearly all respondents are direct importers of apparel, i.e., they purchase
apparel directly from abroad for their own account. Most are also indirect
importers, i.e., they purchase products domestically that have been manufactured
overseas and imported into the U.S. by another party.
Of the 15 manufacturers who responded, all but three (Nike, Inc., Liz
Claiborne and Russell Corporation) own or have ownership interest in overseas
production facilities. Most of these facilities are in Latin America, Mexico,
Canada and the Caribbean, but a few are in Asia (China, Sri Lanka, and the
Philippines). Some of the manufacturers (Oxford Industries, Sara Lee
Corporation, and VF Corporation) indicated that the majority of their imports
come from wholly owned plants. Virtually all of the manufacturers surveyed also
contract out at least some of their overseas production to non-company-owned
facilities. Some manufacturers have close ties to certain contractors, and
account for a large share, if not all, of the merchandise that they manufacture.
In other cases, they may use a contractor facility for only a short time, and
account for a small share of that manufacturer's production.
Some of the manufacturers referred to the advantages of spreading their
production across many countries in order to avail themselves of available
import quota. Nike, Inc. ('Nike') for example, stated that it is constantly
seeking out new apparel suppliers due to the limited amount of quota available
in each country for importing apparel into the United States. Others indicated
that they source from only a few countries.
Most of the manufacturers also use local buying agents. Only three (Levi
Strauss & Co., Fruit of the Loom, and Nike) specifically stated that they do
not use buying agents. A few manufacturers indicated that they mainly use
buying agents in countries where they do not have their own production
facilities or extensive knowledge of the countries' garment industry.
None of the retailers responding to the survey indicated that they own or
have an ownership interest in overseas production facilities. Many of them
import from a very large number of suppliers and contractors in many countries.
JCPenney Company, for example, contracts with more than 2,000 suppliers in more
than 80 countries. Retailers who sell private-label merchandise often deal
directly with overseas contractors, who manufacture merchandise to their
specifications. Other retailers, who do not carry private label garments,
indicated that they purchase imported goods that are already made from a variety
of suppliers in the U.S. or abroad.
Several of the retailers surveyed (Ames Department Stores, Dress Barn, Inc.,
Home Shopping Network, Inc., Mercantile Stores Company, Ross Stores, Inc., Stage
Stores, Inc.,62 Venture Stores
and Woolworth Corporation) indicated that they purchase all or most imports
through one or more buying agents or suppliers located in the U.S. and/or
abroad. One retailer (BJ's Wholesale Club, a division of Waban, Inc.) indicated
that it only buys imported apparel domestically from wholesalers and
3. Survey Results
Of the 42 companies that provided reportable responses to the survey, 36
have adopted some form of policy specifically prohibiting the use of child labor
in overseas production facilities. Thirty-four have developed their own
policies, and two have adopted the policy of their association or buyer.
Appendix C contains the current codes, policies and other documents that were
provided by survey respondents.63
Questionnaires were sent to 15 garment manufacturers, all of which responded
- All 15 manufacturers - Fruit of the Loom, Hartmarx Corporation, Jones
Apparel Group, Kellwood Company, Levi Strauss & Co., Liz Claiborne, Nike,
Inc., Oxford Industries, Phillips-Van Heusen, Russell Corporation, Salant
Corporation, Sara Lee Corporation, Tultex Corporation, VF Corporation and
Warnaco Group - have adopted some form of policy prohibiting child labor in
overseas production facilities.
- Fourteen of the 15 manufacturers have developed their own policies, most of
which are in the form of codes of conduct, statements of principles, vendor
requirements, or terms of engagement.
- Hartmarx subscribes to a "Statement of Responsibility" developed
by the American Apparel Manufacturers' Association (AAMA), which contains a
provision on child labor.
- Two manufacturers - Levi Strauss & Co. ('Levi Strauss') and Warnaco
Group ('Warnaco') - also have guidelines for selecting the countries where they
produce garments based on political, social and human rights concerns, among
others. Levi Strauss, for example, does not do business in Burma.64
BOX II - 2
|Fruit of the Loom
Jones Apparel Group
Strauss & Co.
b. Department Stores
Questionnaires were sent to 10 department stores, eight of which
responded (Box II-3).65 Seven
of the eight responses were reportable.66
BOX II - 3
|Dillard Department Stores
Federated Department Stores
JCPenney Company Kohl's corporation
(Response not reportable)
May Department Stores (Did not respond)
Montgomery Ward Holding Company
Neiman Marcus Group
(Did not respond)
Sears Roebuck & Company
- Six of the seven department stores that provided reportable responses to
the survey - Dillard Department Stores, Federated Department Stores, JCPenney,
Mercantile Stores Company, Nordstrom and Sears Roebuck & Co. - have adopted
some form of policy statement that specifically addresses child labor in
overseas production facilities.
- All of the seven have developed their own policies on this subject.
- Montgomery Ward said that it does not tolerate the use of child labor in
the manufacture of imported goods, but did not provide the Department of Labor
with documentation of a formal policy. The Company subscribes to the National
Retail Federation's code, which does not specifically mention child labor.
c. Mass Merchandisers
All 10 mass merchandisers who were sent questionnaires
responded (Box II-4). Nine of the responses were reportable.67
BOX II - 4
|Ames Department Stores |
Dayton Hudson Corporation
Family Dollar Stores
Shopko Stores (Response not reportable)
- Six mass merchandisers - Dayton Hudson Corporation, Dollar General
Corporation, Price/Costco, Inc., Venture Stores and Wal-Mart Stores - have
adopted policies specifically addressing child labor in overseas production
- All of these six have developed their own policies on child labor.
- Three mass merchandisers - Ames Department Stores, Family Dollar Stores and
Waban, Inc. - indicated that they do not have a policy specifically addressing
child labor in overseas facilities.
- Ames Department Stores ('Ames') indicated that all purchase orders issued
on behalf of Ames or any of its affiliates require compliance with, among other
laws, the U.S. Fair Labor Standards Act (FLSA) and the "Federal Child Labor
Act."69 It is not clear
whether Ames' purchase orders contain any language on international production.
- Family Dollar Stores ('Family Dollar') indicated that its purchase orders
include a requirement that vendors comply with all labor laws. The company also
indicated that it utilizes the National Retail Federation's (NRF) "Statement
of Principles on Supplier Legal Compliance," which does not contain a
provision specifically addressing child labor.
- Waban, Inc. ('Waban') indicated that it does not have a code of conduct
regarding labor practices in overseas production, but generally requires that
vendors comply with all applicable laws.
d. Specialty Stores
Surveys were sent to ten specialty stores, nine of which responded (Box
II-5).70 Of the nine
responses, eight were reportable.71
BOX II - 5
|Burlington Coat Factory |
County Seat Stores, Inc. (Did not respond)
Ross Stores, Inc.
Stage Stores, Inc.
The Talbots, Inc.
The Dress Barn, Inc.
The Marmaxx Group (Response
- Six specialty stores - the Dress Barn, Inc., The Gap, The Limited, Stage
Stores, The Talbots, Inc. and Woolworth Corporation - indicated that they have
adopted policies specifically addressing child labor in overseas production
- Of the six, all but Stage Stores have developed their own policy. Stage
Stores indicated that it purchases all imported merchandise through the
Associated Merchandising Corporation (AMC) and uses AMC's code, which contains a
provision on child labor. Stage Stores also stated that it is in the process of
developing its own code.
- Two specialty stores - Burlington Coat Factory and Ross Stores, Inc. - do
not have a policy specifically addressing child labor in overseas production
- Burlington Coat Factory does not have a policy specifically addressing
child labor in overseas production facilities, but does have a provision in its
purchase orders requiring vendors to comply with all applicable laws, including
the Fair Labor Standards Act.
- Ross Stores has guidelines in its purchase orders that require compliance
with all applicable federal, state and local laws and regulations, including the
federal child labor law,72 but
these guidelines do not appear to address international production. Ross Stores
is currently reviewing its importing process, however, and considering revising
its "Conditions of Contract."
e. Non-Store/Direct Apparel Marketers
All three Non-Store/Direct Apparel Marketers who
were surveyed responded (Box II-6).
BOX II - 6
Non-Store/Direct Apparle Marketers
|Home Shopping Network, Inc.|
Land's End, Inc.
- Home Shopping Network, Land's End, Inc. and Spiegel all have developed
their own policies specifically addressing child labor in overseas production.