Spell & The Gypsy Collective

A. The main facts about the activities of the company.

This modern-bohemian fashion brand started with the idea of two sisters in Byron Bay, New South Wales, Australia. They started by using beads bought from local craftsmen to hand-make their designs. While their business grew, their most important thing remained to help local traders, as stated on their webpage: “All garments are proudly designed and sampled in the Arts & Industry Estate of Byron Bay, and produced ethically in factories around the world.” Also, they are specifically focused on not negatively affecting the environment, that it is why, as they say in their webpage: “We’re excited to have begun our ethics and sustainability journey.”

Spell & the Gypsy Collective (from now on S&G) is all things adornment; in leather, turquoise, feathers, vintage silks, sterling silver and all the other gypsy treasures we stumble upon along the way. And their products are: hand-crafted Jewellery and adornments of leather, turquoise, sterling silver, hand-carved bone & wood, antique chain & gypsy treasures. Soft leather, hand-crafted with love. Luscious vintage inspired silk and rayon kimonos & Spell’s signature style fashion range of boho meets beach sass - in cottons, silks and jerseys, oyster, charcoal and animal print.

S&G is an example of a business that successfully combines the creation of economic values with the respect of ethical values. When they started they were focused on "People + Planet", and they had no idea what could happen, nor how successful they could become. When talking about "People + Planet", they are talking about their caring by their workers and also, by the environment. These responsibilities about the people and the planet would better understood in the next section in which there are explained the ethical challenges that S&G is addressing.

Nowadays they are a very successful business, with impressive online sales and they have a huge audience on their Instagram, almost 800k followers, while keeping their ethical values in mind. Moreover, in the last month they have a huge increase of a 347.9% in the visits of their website, moving from 150k visits in April 2017 to 650k visits in May 2017. Then, this is a great example of how a local label, from Byron Bay (that small “hippie” village in the Australian East Coast), has conquered celebrity and social media, keeping with their ethics values.

B. The Ethical challenges this company is addressing.

S&G utilises factories based in China, India and Perú. They use a strict Code of Conduct within their working activities that address a variety of areas but focus on: working hours, non-discrimination, child labour, freedom of association, wages, disciplinary practices, health and safety, involuntary labour and legally binding. The manner in which S&G implement each focal policy is described.

 Working hours: Hours of work for each employee comply with applicable laws and industry standards. In any event, workers are not on a regular basis required to work in excess of 48 hours per week and is provided with at least one day off for every seven-day period. Overtime is voluntary, does not exceed 12 hours per week, is not demanded on a regular basis and is always compensated at a premium rate.”

 Non-discrimination: Recruitment, wage policy, admittance to training programmes, employee promotion policy, policies of employment termination, retirement, and any other aspect of the employment relationship is based on the principle of equal opportunities, regardless of race, colour, sex, religion, political affiliation, union membership, nationality, social origin, deficiencies or handicaps.

 Child Labour: There is no use of child labour within the environment of S&G. The age for admission to employment is not less than the age of completion of compulsory schooling in each country of employment and, by company standard, not less than 15 years.

 Freedom of association and the right to collective bargaining: S&G recognises the right of all workers to form and join trade unions and bargain collectively.

 Wages: Wages and benefits paid for a standard working week is met at least by legal or industry minimum standards and are always sufficient to meet basic needs of workers and their families and to provide some discretionary income.

 Disciplinary Practices: Physical abuse, threats of physical abuse, unusual punishments or discipline, sexual and other harassment, and intimidation by the employer is strictly prohibited.

 Health and Safety: A safe and hygienic working environment is provided in each company setting, and best occupational health and safety practice is promoted, bearing in mind the prevailing knowledge of the industry and of any specific hazards. S&G pay specific attention to occupational hazards specific to this branch of the industry and assure that a safe and hygienic work environment is provided for. Effective regulations shall be implemented to prevent accidents and minimise health risks as much as possible.

 Involuntary Labour: S&G emphasises that there is never the use of forced, including bonded or prison, labour.

 Legally Binding Employment Relationship: S&G state that obligations to employees under labour or social security laws and regulations arising from the regular employment relationship are not to be avoided through the use of labour-only contracting arrangements, or through apprenticeship schemes where there is no real intent to impart skills or provide regular employment. Younger workers are given the opportunity to participate in education and training programmes.

S&G claims that all of their factories are audited and accredited by 3rd party, internationally recognised auditing bodies in order to ensure that these ethical standards are upheld and enforced. It is however important to emphasise that all of the above are according to the company’s published statements, and so in the absence any available accessible hard data, we need to consider their policy credibility, thoroughness and such other issues of transparency.

S&G aims to build long-term, authentic relationships with their suppliers. Also, they only work with factories that are committed to Ethical Trade and share in the wider Spell Sustainability vision. They are taking and improving, day by day, their ethics and sustainable journey by having mapped their supply chain and worked with independent experts to ensure their factories are meeting strict ethical standards. Moreover, their attention is now focused on environmental practices, and they are working with independent sustainability specialists to create a 2020 sustainability vision for the next three years and beyond. Furthermore, they are really proud of all this, given this is key for them, and they want to share all this process, so they are teaching a lot of people and other business with this ethical journey.

Also, Braveheart’s is an Australian charity with a mission to prevent child sexual assault in their society and serve this mission without fear or compromise, ensuring the best interests and protection of children come first. Elizabeth and Isabella, the founders of S&G, are mothers and together are very passionate about contributing to this cause and supporting Bravehearts’ mission of preventing child sexual assault in our society. It takes a community to raise a child. It also takes a community to protect a child.

C. What makes you believe this company is really ethical and why you trust it?

S&G shows absolute transparency in their website, which fosters trust. We believe in this company because they truly show who they are and which factories they use and what happens in these factories. This is very different from the average clothing brand who mainly pursuits profit.

The most important reason why S&G inspires us is that this company is built on CSR, instead of the CSR just being a small part of their company. They really embedded CSR in their strategy, which also gives them their firm specific advantage. Furthermore, their high level of transparency about their ways of producing, their suppliers, all the factories involved, and the other parties that are involved in the process. Besides this, they also value their cultural heritage and recognise and promote ancient traditions. Taken together, they follow a way of producing, which is really far from the “Western mass-consume culture”. Therefore, companies like S&G might be the next step towards a sustainable consumer culture.

D.The possible challenges facing the company in the future and how you think this company may improve.

The prices of S&G’s products are relatively high for the general public. In the current society people often prefer having several cheap clothes instead of less more ethical clothes. If we go back to the 1920s consumers’ needs were very different, they wanted to meet their basic needs and purchases were based on functionality. Following, clothing companies decreased prices due to economies of scale and scope, and through outsourcing and disregarding human rights and/or environmental standards in these factories.
Today, consumers buy more than they need, and never feel fulfilled with their purchases. Consumers externalize these problems and do not think of the consequences of their purchases. This current problem in consumers’ mindset might be a big challenge for S&G. Nevertheless, this is a challenge that is reachable. Consumers can be teached, awareness can increase. We believe that no person is inherently bad and prefers buying unethical clothes compared to ethical clothes. Therefore, if enough consumers try to invest in more ethical and sustainable products, like the ones that S&G offer, others will follow. After all, people love herding. Therefore, we think that if the consumer culture will change, S&G will be able to grow even larger because price will no longer be an issue for the consumer (until a certain level).

Another challenge for the company might be finding factories that are willing to work with this level of ethical standards. Their high level of transparency is a very good first step towards honest communication, but this transparency also needs to be credible. If the government in the developing countries where you produce are corrupt, and the factory workers claim they prefer working in bad conditions over not working at all, it is hard to check whether all human right standards are really met. Factory owners do not want to lose their cost advantage towards other developing countries. This problem is only likely to be solved if S&G can check the entire production process. Perhaps, when they grow even further, they can own one of the factories and make sure their sustainable and ethical vision is fulfilled.

S&G might be able to help other companies around the world setting up a likewise shop that cares about local traders, sustainability, human rights, transparency, and the other aspects mentioned above. This way the rest of the world can benefit from their success, and can learn how to built a company upon CSR.