Green Cotton

Some good or bad news came out this week– depending on your perspective: Steve & Barry’s, retailer for low cost brands, filed for bankruptcy on Wednesday. Despite the ethical and environmental questions that many of us had in recent months (see Green Cotton’s Part I and Part II of the Cheapest Dress in the World), I must admit that I was shocked by the news.

Given their tremendous growth over the past two years (opening more than 200 stores) coupled with high profile draw of their celebrity lines such as Bitten by Sarah Jessica Parker, I was not under the impression that they were about to go under. Rather, I thought they were enjoying a price-driven surge amidst our economic downturn that would last for years to come. As a privately held company however, it appears we were not given the whole story until recently.

According to this weeks NY Times article and CNN reports, it appears that Steve & Barry’s may have miscalculated cash flow on a couple of fronts: 1) increasing lease costs (due to lapses in temporary landlord incentives put in place to incentize entry into resource-poor areas); 2) decreasing revenue from certain items such as the Jessica Parker dress (featured in Part I and Part II) associated with temporarily lowered prices; 3) high celebrity licensing fees and 4) all of the above combined, creating an inability to pay off immediate debts.

All these factors, combined with rising oil prices, tightening of credit markets and decreased retail vitality, create a sure-fire formula for a downward crash. Steve & Barry’s is not the first company to run into these problems.

Yet what is unique about Steve & Barry’s story for me, and perhaps some of you, is that the company’s downturn represents yet another example of conventional input-focused models (driven almost exclusively by price) failing to deliver over time. To me their story was inevitable, it just happened to be a lot sooner than I expected.

It is becoming increasingly apparent to me (as oil prices increase and ice caps continue to melt) that when businesses adopt environmental sustainability criteria and fair wage practices from the beginning of production to the storefront, a more sustainable business model is created, not only for our generation, but for generations to come. Even when this means passing some increased cost onto consumers, ultimately this is a good thing, since it creates a market based on “true costs” rather than partial or imagined ones.

The other benefit of increasing product cost (eg in the case of organic clothing), is that ultimately that means we will buy fewer dresses or other items for the season. Plus, we are more likely to appreciate the items more since we invested more in them and will likely not throw them away as quickly. By the way, 80% of garments end up in the landfill within a few years of their purchase (!).

On the other hand, countless companies are currently pioneering social and environmental programs that actually save them money over time and therefore do not lead to increased customer costs. For example, Patagonia, Stoneyfield Farms, Eileen Fisher, Seventh Generation, Timberland, the list goes on….have all proven in one way or another that environmentally sustainable practices (recycling programs, renewable energy investments, waste management, organic fabric sourcing) can all be profitable – in addition to sustainable. See Stirring it Up by Gary Hirschberg for more details. (By the way, I just finished reading that book – and it is great, highly recommend it!).

By creating more holistic business practices that factor in natural resources which are not finite as well as human resources, the fabric of global communities, perhaps our companies will stay in business longer too. Margins may be higher and we may simultaneously create stronger linkages between the land we cultivate, the workers and artisans that produce our goods and those of us who buy them.

May the Steve & Barry lesson be one that others learn from in carving their path into the retail future.

Photosource top: Mark Lennihan/Associated Press as seen in The NY Times

Photosource below: Tony Ciola for the NY Times also noted in Green Cotton post on the Cheapest Dress Part I

Photosource: grooveygreen.com featuring Nau clothing

NY Times Fashion & Style section announced this morning that the much coveted Nau is going out of business. Sundance Channel did a piece on them this week too in their ‘Big Ideas for a Small Planet’ which I blogged about on May 3rd. Unfortunately Nau’s website posts the sad letter from the team stating that that they are ‘saying goodby for Nau’.

While we knew the company took on significant risk, and that there were questions from the beginning as to whether the model would actually work, I must admit that I increasingly felt confident in the staying power of their brand. I’ve been reading about Nau since last September, and just last month a half dozen people I knew asked me if I had heard about this company. They successfully seem to be generating ‘buzz’ around their company.

Yet at the same time, significant investment went into the company – from its design and manufacture of high tech ‘green’ fabrics to designing and sewing the clothes, to building brick and mortar stores and creating a cutting edge website. Unlike the mom and pop online green boutiques, Nau was positioned as the next Nike from the get go. One reviewer I read last fall noted correctly that the company is postured to either succeed beautifully or fail miserably. Unfortunately, it seems that the latter has won out.

Why? Led by former Nike executives, the Nau team is not lacking in the experience, leadership or management arena. While they are ‘green’ in the environmental sense, management wise, this is not the case. So what is it? According to the team, the economy is cited as the main factor in their decline. Slowing consumption, rising fuel costs, rising cost of goods, decreasing purchases….we have heard it more than once in the last few months. So while I agree that the economy is forcing more than a handful of retailers to change course and downsize, I would also venture to say that a few other things could have been done to help stay afloat. (1) One is that their prices seemed high for what they offered and for who they targeted. While I can absolutely appreciate their stylistic, very green apparel, Americans may not be quite ready for those prices at to buy on the green principle as such. Take a look at Cheapest Dress in the World – with expectations as low as $8.98, can we stretch our imaginations to pay $300 for a spring coat?
(2) Color schemes and styles may have been too muted. Everything seemed a bit too dark. Not enough brightness, freshness and newness. Or maybe they were not geared toward women as much as men? I am not sure, but something seemed slightly off. (3) Finally, with REI and Patagonia ‘down the street’ so to speak, or one ‘url tab’ away on the Internet, one has to have a pretty compelling reason to go to Nau rather than long-established, trusted brands. Both of these companies are increasingly stepping out of the pure outdoor gear space and into more fashion-forward ‘office-adaptable’ clothing as well as are increasingly ‘green.’

Also, Nau mentioned that their stores encouraged people to ship whatever products they purchase to their homes rather than carry away with them. I would have to say that this seems troublesome. Counterintuitive from every angle. Isn’t one satisfaction from shopping the ability to carry the item home with you and brighten your day? Also, isn’t walking home with something intuitively more ‘green’ than having it shipped to your house? From a consumers standpoint, I can see how this policy would be troublesome.

All in all however, I must say that I am sorry to see Nau go. I really admired their mission, vision and core company principles. Part of me thinks they may be jumping the gun—who knows what could have been possible if they road the wave a little longer? At the same time, in this economy nothing is certain, and if product, price and promotion are slightly off mark, well, there is not much hope for survival. Wishing the team at Nau all the best in their next venture.

Send me your comments to greencottonblog@gmail.com or post below.

Save This Page to Del.icio.us

Photo source: Keetsa.com

For the first part of this post see Part I. This post is in response to last week’s NY Times Style section article on the world’s cheapest dress.

So lets take a closer look at the first 10 miles of apparel production. For a garment to be sold at a price as low as $8.98 – guess what the fabric had to cost per yard before dying – a heck of a lot cheaper than that! Probably less than a dollar per yard. Furthermore, we must also think about how many pesticides were spilled into waterways and the food chain as a result of the cotton grown. In addition, how many children were employed to pick that cotton or spray the pesticides? How many laborers were paid insufficient wages and make the fabric and what kinds of dyes were used? For more information on the real costs of cotton, see White Gold: the true costs of cotton production.

I was at a trade show recently in Las Vegas recently and stopped by the sourcing section to talk to some vendors and visit with sustainable designers. As it turns out, organic fabrics cost anywhere from $11 to $50 per yard. Some online retailers and wholesalers are available at Harmony Art and Near Sea Naturals so you can see for yourself. This is a big difference between conventional! No wonder few retailers are talking about moving in this direction in a big way.

Yet at the same time, organic cotton follows a bare minimum of environmental and social standards to ensure resource management and human rights compliance. Furthermore, as certified organic fabrics, they meet a whole set of criteria at every step in the production process – that ensures they are good for the environment and good for you. For more on differences, see Organic v.s Conventional.

These fabrics cost more because guess what? It costs more to make a good product. Don’t be fooled by cheap prices. There is definitely something to be said for economies of scale and just-in-time inventory, but there is a limit to how low one can go with out sacrificing the environment or humanity along the way.

In general, higher priced organic cotton reflects the TRUE cost of producing materials in alignment with environmental conservation and sustainability. Furthermore, the natural resources used and conserved in the process arguably last longer – so the good news is we can be ‘buying dresses’ for a lot longer! Plus, we will have less contaminated waterways and ecosystems and our great grandchildren may actually live to see some still thriving elements of our natural world.

Be a smart consumer. Ask questions and be aware of supply chain steps and demand that your clothing fair, environmentally smart, good for you & the world. You know something is wrong when 2 lattes cost more than the dress you are wearing (thanks to Steve Allen’s comment).

Remember: we vote with our wallets. The checkout line is the biggest voting machine in America, and in the world actually. So, next time you are at the check out line, ask yourself, could this really be this cheap? If your honest answer to yourself is no, then don’t buy it! I know its tempting to buy cheap goods, but if you don’t need it and can’t afford the ‘smarter’ one, simply don’t get it.

Save This Page to Del.icio.us