TRANSPARENCY IN SUPPLY CHAINS STATEMENT
Centric Brands Inc. is committed to the highest ethical principles and standards and legal compliance in all aspects of our business and product supply chain. We choose suppliers who we believe share that commitment.
We take the risks of slavery and human trafficking in our supply chain very seriously. Like many companies manufacturing or selling products in California, we are required to comply with the California Transparency in Supply Chains Act. This law was designed to increase the amount of information available to consumers about the efforts of businesses to eliminate the risk of modern slavery, human trafficking and similar human rights violations from their product supply chains. Throughout this disclosure, we use the terms “slavery” and “human trafficking” as examples of the many forms of involuntary labor described by the International Labour Organization, all of which are prohibited under our requirements for suppliers and other manufacturing partners.
Centric Brands Inc. is a leading lifestyle brands collective created by the acquisition in October 2018 by Centric Brands Inc. (formerly known as Differential Brands Group Inc.) of a significant part of Global Brands Group Holding Limited’s North American licensing business. Centric Brands brings together creative minds from the worlds of fashion and commerce, sourcing, technology, marketing, digital and entertainment. We design, produce, merchandise, manage, market and manufacture through contract supply chain partners, kidswear, accessories, and women’s and men’s apparel under owned, licensed and private label brands. We distribute our products across all retail and digital channels in North America and in international markets.
We license over 100 brands and produce branded or private label products across our core product categories. We sell our products through a cross section of leading retailers, over the web through retail partners and through our own retail stores, e- commerce websites and partner shop-in-shops. We employ approximately 4,000 employees primarily in offices in New York City, Greensboro, Los Angeles, Toronto and Montreal, and in retail stores throughout North America.
VERIFICATION OF SUPPLY CHAIN.
To determine which sourcing countries and sectors pose a risk of slavery or human trafficking, we utilize several publicly-available governmental and intergovernmental resources, including the U.S. State Department’s annual Trafficking in Persons Report and the U.S. Department of Labor’s List of Goods Produced by Child Labor or Forced Labor. We continuously reassess our approach as these resources are updated and new, credible resources emerge. In addition, we are a member of the American Apparel & Footwear Association, a leading industry association which provides tools and actionable guidance to its members for the protection of workers’ rights, including the prevention of slavery and human trafficking.
We conduct audits of our direct suppliers to evaluate compliance with our Global Supplier Principles, which include prohibitions on slavery and human trafficking. We utilize unaffiliated third-party workplace compliance audit firms to execute announced and unannounced audits. We collect initial audit information for all new suppliers. To determine factory selection and timing for audits thereafter, we look at several criteria, including past compliance performance, if available, to determine risk and audit priority. Suppliers identified as high risk through the assessment process undergo more frequent monitoring to ensure continuous progress is made toward compliance.
At the inception of our business relationship and annually thereafter, all of our suppliers must certify receipt, review and understanding of the Centric Brands Inc. Global Supplier Principles and Centric Brands Inc. Involuntary Labor Policy. Among other requirements, these standards prohibit the use of any form of involuntary labor, including child, forced, bonded, trafficked, indentured or prison labor, prohibit the purchase of materials from persons or entities utilizing any such labor, and prohibit subcontracting without our prior written approval. In addition, we require all direct suppliers to comply with applicable laws regarding slavery and human trafficking within their countries of operation.
ACCOUNTABILITY STANDARDS AND PROCEDURES.
We also maintain strong internal accountability procedures, which are communicated through our Code of Business Conduct and Ethics (the “Code”). Under the Code, our employees are required to follow our commitment to the highest ethical standards and the law in all their business dealings and to report any violations or suspected violations of the law or the Code. Compliance with the Code is a condition of employment, and failure to abide by these terms can result in any corrective action we deem necessary, which may include notifying appropriate authorities and/or imposing disciplinary action, up to and including termination of employment.
Our employees who regularly visit suppliers are asked to assess conditions informally while on location and report any concerns. Our compliance and sourcing teams meet regularly to review supplier compliance performance and develop strategies to help suppliers improve compliance. In cases of non-compliance, we examine the specific situation and support our suppliers in developing an appropriate strategy for timely resolution, which may include a formal corrective action plan. A supplier’s failure to successfully remediate the non-compliance may result in termination of our business relationship with the supplier.
We plan to provide training in 2019 to employees with direct responsibility for supply chain management to ensure they are knowledgeable and aware of the issues and concerns surrounding slavery and human trafficking. This training will focus specifically on recognizing and preventing forced labor risks within our supply chain. We encourage our agents and suppliers to participate in seminars and training programs on compliance issues, including slavery and human trafficking, to increase their awareness of best practices to mitigate risk within our supply chain.