Sportswear Industry Data and Company Profiles
Background information for the Play Fair at the Olympics Campaign
This report was produced by the Clean Clothes Campaign as
background information for the Play Fair at the Olympics campaign,
which starts march 4, 2004 and aims to contribute to the improvement
of labour conditions in the sportswear industry. More information
on this campaign and the "Play Fair at Olympics Campaign
report itself can be found at www.fairolympics.org
The report includes information on Puma Fila, Umbro, Asics, Mizuno,
Lotto, Kappa, and New Balance. They have been labeled "B"
brands because, in terms of their market share, they form a second
rung of manufacturers in the sportswear industries, just below
the market leaders or the so-called "A" brands: Nike,
Reebok and Adidas.
The report purposefully provides descriptions of cases of labour
rights violations dating back to the middle of the nineties, so
that campaigners and others have a full record of the performance
and responses of the target companies to date. Also for the sake
of completeness, data gathered and published in the Play Fair
at the Olympics campaign report are copied in for each of the
companies concerned, coupled with the build-in weblinks this provides
an easy search of this web-based document.
Obviously, no company profile is ever complete. We urge all those
who read this document to provide us with updates, corrections
and additions via info@cleanclothes.org
The sportswear industry, which includes both athletic footwear
and apparel (garments), is very labour intensive. Therefore, most
production takes place in low-wage countries. The majority of
employees within the supply chains of sportswear companies are
young and female and they inevitably work under unreasonable terms
of employment and poor working conditions. These include short-term
contracts that include no health or social benefits, long working
hours and unpaid overtime, unhealthy and unsafe working conditions,
poor wages due to the fact that payment is often tied to unrealistic
production targets or piece-rate systems, and redundancy policies
that offer inadequate severance pay compensation. The various
- often legal - barriers to the right to organise only exacerbates
the problem because employees are prohibited from demanding basic
workers rights.
During the 1990s, branded corporations within the athletic sportswear
industry - particularly Nike, Reebok, and adidas - were targeted
by transnationally organised anti-sweatshop campaigns. In response
to these campaigns, the targeted companies instituted some small
labour rights improvements. For example, they declared their commitment
to the principle of respecting a worker's right to organise and
they began to co-operate with various international monitoring
and verification initiatives.
"B" brands have until now often managed to escape the
level of scrutiny of the sweatshop conditions that the "A"
brands have been subjected to. While understandable from a tactical
angle, the labour practices in the supply chains of the "B"
brands are very similar to those of the larger brands. In fact,
they often use the same suppliers. As also revealed in the Play
Fair at the Olympics report "B" brand workplace conditions
are no different from those of the larger brands. Their purchasing
practices - like those of the "A" brands - encourage
suppliers to adopt poor employment practices and working conditions.
Suppliers transfer the burdens of unstable contracts, short delivery
lead times, and low prices onto their workers.
The "B" brand companies have done little, if anything,
to ensure that labour rights are respected in their supply chains.
In fact, in a competitive industry like the sportswear industry,
it is the failure of these companies to follow suit is that is
impeding the progress of the entire sector. That is why the Olympic
Campaign is focusing on these brands.
When it comes to improving labour rights, most companies have
thus far been extremely wary of moving too far ahead of the rest
of the industry for fear of losing their competitive advantage.
The sportswear industry is also characterised by the fact that
factories and informal supply chain networks commonly supply a
variety of buyers. As a consequence, as more buyers begin to demand
respect for workers' rights, the greater the incentive becomes
for factories to comply.
This report has compiled information on the labour conditions
in factories producing for Asics, Fila, Kappa, Lotto, Mizuno,
New Balance, Puma, and Umbro.
It also includes company portraits of two large Asian transnational
corporations (A-TNCs): Yue Yuen, controlled by the Taiwanese-owned
Pou Chen, and Li & Fung. Yue Yuen is the world's largest shoe
manufacturer, employing some 250,000 workers. They are large suppliers
of Nike, Reebok, adidas, Asics, Puma, and New Balance.
Li & Fung, is one of the world's largest sportswear agents,
functioning as a supply chain manager for numerous apparel brands,
including Kappa. Perhaps the most remarkable fact is that although
both companies are largely unfamiliar to the larger public, their
net profits actually exceed those of the brands discussed in this
report.
These two companies represent the increasing power of Asian TNCs
within the global supply chains of the sportswear industry. Instead
of making profits from marketing and distributing branded sportswear,
they prefer to produce for consumer markets elsewhere. Henry Cornell,
a Goldman Sachs' executive, put it this way: "These types
of businesses are not very sexy... but it is a superb economic
model for northern Asia. They can make significant profits being
manufacturers for research and development-oriented companies
in the United States."
The increasing domination of these companies is further indicated
by the "increasing oligopolisation of the components market
industry [that] raises barriers to entry and places the power
to develop and handle component networks in the hands of the leading
global suppliers." In other words, these corporations have
managed to turn the tapping of the world's reservoirs of cheap
labour into a highly profitable activity. Their increased hegemony
calls into question some of the presumed power dynamics within
the global supply chains of sportswear where brand-name corporations
are often considered the strongest players who dictate terms to
the presumed weaker supplier.
This report commences with a sector overview of the position
that the "B" brands and A-TNCs occupy within the sportswear
market. It also briefly discusses some general characteristics
of the sportswear and athletic footwear market.
The main sections of this report are comprised of individual
company profiles. Each company profile includes the following:
- product categories
- history
- business info
- fact sheet
- sound bites
- athlete endorsements
- code of conduct
- sites of production
- labour and working conditions
(The company portraits of Yue Yuen and Li & Fung follow a
slightly different pattern.)
Most of the information provided in this report comes from the
Clean Clothes Campaign (CCC) archives, while some of the data
was found in annual reports and various Internet sources. Some
of the material on working conditions came via the "Play
Fair at the Olympics Campaign" report, which is based on
various research reports on working conditions in the sportswear
industries of Bulgaria, China, Cambodia, Indonesia, Thailand,
and Turkey.
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