Kathmandu proves retailers shouldn’t be afraid of transparency

Kathmandu ChristchurchNew Zealand-founded retail chain Kathmandu is a unique travel, adventure, outdoor apparel and equipment brand that has put innovation and a hunger to explore at the core of its culture, not unlike its customers.

The Kathmandu journey began 30 years ago, born from a desire to make outdoor adventure more accessible to everyone. Fast forward to 2019, and the brand is responding to the ever-changing needs of travellers and acting with people and planet in mind.

The value Kathmandu places on all its stakeholders – the planet, the environment, the team, customers, suppliers and investors – is reflected in its A rating in the 2019 Ethical Fashion Report released today by Baptist World Aid Australia.

The report, which was produced in conjunction with Tearfund in New Zealand for the second year in a row, grades brands on the strength of their systems to reduce the risks of slavery, child labour, exploitation, and environmental degradation in their supply chains.

“Maintaining our A-grade score is a great acknowledgement of the work we have done around worker well-being but also the work we have already done to reduce our environmental impact.” Gary Shaw, Kathmandu’s corporate social responsibility manager, said.

The A grade reflects Kathmandu’s commitment to transparency, active change and innovative initiatives to become a more sustainable organisation for the future. For example, Kathmandu introduced an initiative in 2018 to give workers in its supply chain a voice through a WeChat feedback system, where workers could simply scan a QR code and leave feedback, which was automatically directed to Kathmandu. They could use this to raise issues about workplace practices and conditions.

“The aim behind our WeChat grievance program was that workers would be able to contact us if they weren’t being treated fairly in their workplace, regardless of language barrier,” Shaw said.

Claire Hart from Tearfund added that “Kathmandu are not afraid of what they might find and have a measured approach to discovering the negative things and the systems to address them.”

Once a privately owned and operated business, Kathmandu in 2006 was acquired by a consortium of private equity funds and later listed on the ASX and NZX. Listing on the exchange brings with it a new level of governance, and the need to be more risk averse to appease investors and retain the market prices.

Burberry witnessed first hand the impact of poor decision-making on the interests of investors and customers. After it was revealed they had burnt $37 million worth of excess stock, their market price in September 2018 dropped into the red.

But John Sette, Kathmandu’s group marketing manager, says sustainability has always been a part of the DNA of Kathmandu, and it has remained committed to this ethos, whether a public company or privately owned.

Kathmandu recently became the first Fair Labour Association accredited brand in the Southern Hemisphere to improve the lives of workers worldwide. It is committed to the 10 principles of fair labour and responsible sourcing, and it was recently ranked 2nd by the Textile Exchange for its use of preferred materials in 2018, such as recycled polyester and cotton.

As Tearfund’s Hart pointed out, “You don’t go to [those] lengths if it’s not a core part of the business”.

Kathmandu’s holistic stakeholder view of the organisation ensures that everyone wins. Driving change to support growth in the top and bottom line and building a brand underpinned by purpose and aligning the organisation’s values with its activities ensures the business is practicing what it is preaching.

What change will you activate in your business today to ensure a business of the future?

Catherine van der Meulen is a new contributor to Inside Retail New Zealand, hailing from Australian shores. She has extensive background in retail at a multinational family fashion business. She has a strong passion and interest in sustainable organisation design and building organisations to create longevity beyond the short term wins. To learn more about Catherine, connect with her on LinkedIn.

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