City Chic Collective has diversified its international sourcing strategy, mitigating supply chain risks in cotton and expanding production outside China.
The Australian plus-size fashion retailer has identified cotton as the largest risk in its supply chain following an investigation.
"With the heightened risks associated with cotton farming, and allegations of forced labour camps being used in cotton farming originating from the Xinjiang Uyghur Autonomous Region (XUAR) we have chosen to make cotton tracing, and better understanding of the sourcing process around cotton, a priority,” the company reported in its Modern Slavery Statement.
“Our chain of custody process also goes beyond just the cotton origins, as we use the same framework for verifying key fibres or hot spots and the supply chains that we deem high risk.”
City Chic confirmed an opportunity to expand its chain of custody process to document all layers of its supply chain and gather evidence on where components and processes originate.
“Not only does this allow us to map down in all our tiers but we also can target high-risk areas, suppliers or components.
“One difficulty we have found is ensuring that what we trace, and what is identified as part of the chain of custody process, is in fact part of the product we produce. In order to try and address this issue we rely not only on documents such as proof of payment, certificate of origin and shipping documents, but we also ask for photographic evidence to help confirm that all the traced components are used in our finished product.
“We initially started this chain of custody process with a specific focus on our cotton supply chain as part of our due diligence to ensure cotton wasn’t being used from sources or regions that we have banned.
“However, as the year progressed, we expanded the policy beyond cotton as part of our enhanced ‘Forced labour policy’ to support our efforts to trace a wider product base and supply chain.”
City Chic does not own or partially own any factory or manufacturing plants.
The retailer confirmed it utilises third-party partner factories or agents which are primarily based in South China. Following the pandemic, City Chic has expanded to new sourcing regions in Bangladesh, India, Morocco, Vietnam and Cambodia.
“Our supply chain has traditionally been China focussed, with the core of our factories still based primarily in the South China provinces," the company reported in its Modern Slavery Statement.
“As our business grows and reflecting on the global uncertainty created by the COVID-19 pandemic, we have continued to diversify our supply chain to new regions outside of China, and over the last year, we have been actively onboarding new suppliers in new sourcing regions.”
City Chic has also integrated the supply base of Navabi, following the acquisition of the brand in July 2021.
“After careful assessment, we chose not to onboard any new suppliers or expand our current factory base with previous suppliers to this brand,” City Chic wrote. “We did inherit a small group of factories that had stock in transit as part of a 3-month transition plan.
“As noted in our previous statements, we are proud of the long-standing strategic partnerships we have in place with several key suppliers.
“These suppliers have grown with our business and have embedded our ethical trade policies in their business operations.”
City Chic currently operates 101 tier 1 factories and 130 tier 2 factories. Tier 1 factories include factory and production workshops, while tier 2 includes fabric mills, accessories suppliers, and dying and printing mills. This is currently across six countries, with 43,236 workers making up tier 1 garment and footwear workers.
Around 51% of its tier 1 factory workers are female, with 79% of its tier 1 factories receiving a ‘green’ risk rating.
City Chic reported that it has fully mapped its tier 1 suppliers, and majority mapped tier 2. It is currently mapping tiers 3 and 4, which, respectively, are yarn and spinning mills and raw materials sources such as farms.