How This Fashion Startup Is Blending Ethics with Profit Will consumer awareness drive better manufacturing standards?

How This Fashion Startup Is Blending Ethics with Profit

Will consumer awareness drive better manufacturing standards?

By Kenny Kline

Founder, JAKK Solutions

Inc.com. Published on: Aug 18, 2016

http://www.inc.com/kenny-kline/how-this-fashion-startup-is-blending-ethics-with-profit.html Accessed Nov. 20, 2016

Many of us remember the 2013 Bangladesh factory collapse, which drew attention to the deplorable conditions in which so many of the western world's clothing and fashion accessories are made.

For Scott Gabrielson, learning about these human rights abuses did more than leave a bad taste in his mouth. It ignited a passion for ethical fashion that informed his studies at the University of Oxford and led to the June 28 launch of his bag and fashion accessory startup, Oliver Cabell.

In spite of the trials and tribulations that are par for the startup course, Gabrielson has maintained a firm commitment to transparency and a belief that "ethics" and "profit" need not be antonyms.

The Genesis of An Idea

"After [the Bangladesh factory collapse], I spent some time trying to understand how this could happen in the fashion space," says Gabrielson. "What I soon discovered was that even traditional designer brands (including some luxury fashion brands) were producing their bags in these conditions."

In 2014, Gabrielson visited a factory in Asia and saw firsthand the disgraceful working conditions. He also noticed the absurdity of the situation unfolding before his eyes: "These bags that were being produced for under $100 in materials and labor were selling for $1,200 back in the U.S.," he said.

Gabrielson was struck by the realization that the large profit margins commanded by high-end brands weren't actually substantiated by their bags' quality.

His budding belief that there was a better way to do high-end fashion coincided with the rise of the direct-to-consumer movement, which saw the sudden disruption of what had been near-total industry control by large conglomerates. The only viable alternative up until this point was to go the boutique route, but traditional sales models (with their need for showroom space, etc.) meant that high-quality, ethically made pieces were often prohibitively expensive.

"We saw that we could produce at much higher quality and sell at a lower price by sourcing our own materials, working directly with factories, and [employing an] e-commerce model," says Gabrielson. An added bonus? Fashion accessories (unlike clothing) tend to be one-size-fits-all, thereby reducing labor costs and the risk of returns.

Building a Foundation

Gabrielson drew on his business idea and his experiences in Asia to define the core values of what would eventually become Oliver Cabell--namely, transparency, quality, and reasonable prices.

The next step was to land a contract with a factory that met these standards. "It took us over a year to get introductions to a factory we really wanted to work with," says Gabrielson. "We needed to convince them to take a chance on us because we were starting with lower minimums."

As it turned out, the European factory proved willing to work with Oliver Cabell primarily because of the company's core values.

"A lot of factories had seen the traditional brands that they'd been working with for the last 50 years or so leave and go to Asia because of reduced materials and labor prices," says Gabrielson. The factory was motivated to work with Gabrielson and his team because they represented a different approach--one that emphasized quality, ethics, and digital sales.

At the same time that Gabrielson was being vetted by the factory, he was also vetting them. He and his team were pleased with the factory's materials standards, labor conditions, and overall commitment to quality craftsmanship. Thus, the means of production were procured.

Defining a Brand

Not only does Oliver Cabell's commitment to quality assist the company in developing mutually beneficial relationships (e.g., with their factory). It's also a core part of the company's financial success.

"Because we're such a new brand, consumers can't rely on our reputation [to make their purchasing decisions]," says Gabrielson. "Our transparency is how we prove ourselves. By opening our doors from a production standpoint and a price standpoint, it allows us to prove to our consumers that we can substantiate the claim of being a high-quality product."

The brand's commitment to transparency also informs its design aesthetic. "Our emphasis is on form and function and removing things that distract from that," says Gabrielson. "We try to keep it simple in everything we do, from our packaging to our products, digital presence, and social media accounts." Instead of releasing in collections (which could quickly get convoluted), Oliver Cabell instead rolls out a new product every month or so.

By keeping it simple, Gabrielson has found, the brand best enables itself to keep things honest and transparent. "We want to tell our consumers the story of our materials, the production process, factory conditions, pricing, etc.," he says. "We only want to be more and more transparent in all aspects of the company."

Contributing to a Movement

In the month and a half since its launch, Oliver Cabell has already seen strong sales. But in addition to making a profit, Gabrielson hopes his company will help drive a cross-industry movement.

Spurred by the likes of Warby Parker, Raden, and Zenhaven, the direct-to-consumer methodology is saving consumers money and pulling back the curtain on how business is done so that consumers are well informed and can decide for themselves which brands they want to align with (and spend money on).

In this way, transparency creates a fairer playing field and "helps consumers and family-owned companies set a benchmark" for what is appropriate in terms of materials sourcing, product quality and production, and pricing, says Gabrielson. "The longer-term goal is to have this methodology become the norm for what consumers expect out of brands."

The opinions expressed here by Inc.com columnists are their own, not those of Inc.com.

Published on: Aug 18, 2016

QUESTIONS :

1.            Is Oliver Cabell’s commitment to transparency motivated by profit or morality? Explain.

2.            There seems to be ‘good’ profit and ‘bad’ profit in business. Discuss.

3.            Evaluate the morality of the large profit margins commanded by the high-end brands from the following perspectives:

              a.             Utilitarian ethics

              b.             Kantian ethics

              c.             Virtue ethics

4.            Evaluate Oliver Cabell’s relationship with its customers and suppliers from a stakeholder perspective.

5.            Evaluate Oliver Cabell’s pricing using the social contract theory.