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Faux or not faux? That is increasingly the question

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On 9 January 2019, the Advertising Standards Agency (ASA) censured Boohoo.com UK Ltd for selling a “Faux Fur Pom Pom Jumper” that in fact contained real animal fur. The advertisement in question (the product page on boohoo.com dated September 2018) was therefore misleading, and breached the CAP Code.

The ruling offers some timely reminders for fashion brands when it comes to advertising and supply chain integrity.

Campaign groups are fashion-forward

The use of animal pelts in clothing is a hot-button issue. For example, on 12 January The Times highlighted the criticism that Harvey Nichols has avoided by pulling the sale of a £68,000 lynx fur coat. It is therefore unsurprising that campaign groups are circling.

The Boohoo faux/real fur issue was uncovered by the animal welfare charity Human Society International, which is investigating the mis-selling of real fur as fake/faux fur as part of its #furfreebritain campaign. Independent laboratory testing revealed that the pom-poms in question were made from animal fur, most likely rabbit fur.  

It seems unlikely that this campaign will let up, and all sellers of clothing incorporating fur (whether real or apparently “faux”) should consider themselves potential targets.

Consumer priorities might be shifting

The Boohoo and Harvey Nichols incidents have occurred in the context of rising consumer interest in more sustainable and ethical fashion. Consumers (and the fashion industry) are waking up to some of the more controversial practices sometimes seen in the fashion industry, and responding accordingly. For example, the world’s first “Vegan Fashion Week” will be held in California next month.

The growing number of more ethically-responsible consumers could represent an untapped new market segment in similar vein to the “grey” and “pink” pounds. The total global market for sustainable goods was estimated to be €2.5 trillion in 2017, and growing. Inaction also poses a business risk. Over a quarter of UK consumers avoided a product or service last year because of its negative social/environmental impact.

Authenticity is key

Consumers are increasingly knowledgeable and sophisticated. The Internet and social media are powerful tools for brand development, but can be equally powerful in spreading brand-damaging information (as illustrated by recent campaigns against New Balance and Canada Goose, among others). A particular risk is that of signalling certain virtues to consumers through marketing, while not living up to those virtues: the calling out of hypocrisy is a favourite pastime on social media sites.   

The ASA’s ruling is particularly damaging for Boohoo because it is not the first time that this has happened. The Environment, Food and Rural Affairs Parliamentary Select Committee’s July 2018 Report on The Fur Trade in the UK identified Boohoo as one retailer that in December 2017 / January 2018 was selling real fur labelled as fake. Boohoo gave evidence to the Select Committee that it had considered its processes robust, and therefore had not investigated the issue when it first was raised. Nevertheless, Boohoo said that it would be improving its processes and increasing the frequency of sample testing.  

Sadly, it seems that Boohoo’s sample testing still was not frequent enough. Boohoo’s response to the ASA included reference to its previously-publicised “commitment” against the sale of real fur. While such a promise might confer a competitive advantage if backed up, this is now likely to ring hollow.

Supply chain integrity matters

Although the Select Committee’s report concluded that real-for-fake substitution is relatively rare in the context of fashion sales as a whole, the ASA’s ruling shows that it is nevertheless a real danger for fashion brands. It is possible that the declining demand for real fur has led to more real fur being slipped into the upstream supply chain in place of supposedly faux fur, echoing the horse meat scandal in 2013.  

Clearly, it is impractical for retailers to check every single garment for animal fur. So what can be done? From a commercial standpoint, suppliers should be carefully vetted, trust build over time, and consideration must be given to supplier trustworthiness in evaluating the value-for-money of supplier proposals (could any up-front savings be cancelled out and more by a supply chain scandal?). Supply chain integrity matters for all sorts of reasons beyond animal fur e.g. the risks of child labour, forced labour / modern slavery, worker safety, consumer safety, etc.

Warranties and indemnities 

From a legal standpoint, it would be prudent to review (and perhaps enhance) the warranties provided by suppliers regarding the source, characteristics and quality of the products supplied, and to ensure that these are continuing warranties. Even better would be to require indemnification for losses caused by breach of such warranties. The question of which species of loss should be excluded (for example, pure economic loss) might be reopened. Fashion brands could also consider introducing or strengthening the right to audit factories in the supply chain, potentially with liquidated damages tied to any issues identified. Finally, brands might consider writing or enhancing their own supplier guidelines, which could make reference to the letter or spirit of international standards (for example, the UN Sustainable Development Goals).  

There is (currently) no substitute for good design and value-for-money

Boohoo’s share price dropped by around 2% following the ruling, but had already strongly rebounded by more than 3% even before Boohoo this week announced strong financial results (expected sales growth in the full year to February 2019 has been upgraded from 38-43% to 43-45%). Sluggish pre-Christmas trading in the fashion retail sector generally likely had a far more pronounced role in causing Boohoo’s recent share price nadir three weeks ago (around 20% below the current price). On a similar note, Ted Baker recently announced strong Christmas trading (up 12% compared to last year), in spite of the ongoing investigation into the “forced hugging” allegations against its CEO, Ray Kelvin.

What do we take from all of this? Perhaps consumers simply do not care about the ethical credentials of fashion brands, and that all that really matters is a compelling product and value proposition. This analysis might be too simplistic, however. Perhaps instead it comes back to the question of authenticity: consumers are (at least currently) willing to stomach more questionable ethical standards from “fast” fashion / mass-market brands (that sell themselves on the basis of choice and/or price) than from brands that sell themselves primarily on the basis of quality and/or luxury. Even if this is the case, given the increasing consumer awareness of issues of sustainable and fair practice, there is no guarantee that mass-market brands will continue to be able to ride out ethical failings.