(Milwaukee Journal Sentinel, The (KRT) Via Thomson Dialog NewsEdge) Sep. 19--Four former Lands' End executives today launched a new online and catalog apparel business that markets clothing with a claim of fair trade practices.

The new company is called Fair Indigo, and it's based in Middleton. Its marketing tagline is "style with a conscience." The company will open its first store at the Hilldale mall in Madison on Nov. 1, and it expects to expand with four to five stores per year, starting in 2008.

The company is headed by Bill Bass, who ran Lands' End's online business. Bass stayed with Lands' End after the company's sale to Sears but left after Sears was sold to Kmart.

Bass' founding partners include Rob Behnke, a former merchandise executive for Lands' End who came up with the idea for the new business; Don Hughes, former chief financial officer for Lands' End; and Elizabeth Ragone, a former Lands' End Internet merchandise executive.

The catalog has 800 styles for men and women, including apparel, shoes, handbags and jewelry, plus fair trade coffee, tea and beauty products. Prices range from $13 for a pack of socks to $425 for a leather handbag, but most of the apparel is priced in a similar range as Lands' End.

The catalog itself has echoes of Lands' End, with substantial product description and extensive narrative and photo coverage of the factories and workers who make the clothing. Styles are aimed at people between ages 30 and 55, and what they might wear to work, Bass said.

The founders spent 18 months preparing for the launch, which started with an idea from Behnke for a fair trade store in Madison. Behnke thought it would be a winner, based on the growing sales of fair trade coffee.

"Don and I said, 'This is a much better idea than just a store in Madison,' " Bass said, noting the interest in buying fair trade items among socially conscious consumers.

One of the biggest challenges in making a fair trade claim for apparel, however, is the fact that unlike coffee and some other food products, there is no certification standard for clothing. The Web site for the certification agency for food fair trade products is www.transfairusa .org.

The standard that large manufacturers and retailers use to avoid charges of sweatshop labor is to ensure that factories where their clothes are made obey local minimum wage and other labor laws, and do not use child labor. But the problem with minimum wage laws in Third World countries is that minimums are very low, said Charles Kernaghan, head of the National Labor Committee, the anti-sweatshop group that initiated protests against Kohl's department stores in the late 1990s and against Kathie Lee Gifford and Wal-Mart before that.

"We spent 18 months seeking out the best factories in the world," Bass said, adding that he focused mainly on small, family-owned factories. Fair Indigo now uses 23 factories in China, Peru, Costa Rica, Indonesia, Nepal and Brazil. Bath products are made by hand in New Orleans by a group of single mothers known as the Soapbox Moms.

Bass' company uses a third-party auditor to make sure that his suppliers are doing what they promise, which includes passing on to workers the extra money Fair Indigo pays for its merchandise.

"It's good, it's admirable," Kernaghan said of the Fair Indigo business plan. "But I feel skeptical."

Kernaghan criticized Bass for not revealing the name of the factories where Fair Indigo items are made. Big companies such as Gap, Levi Strauss and Nike now make public the identity of their suppliers, after rights groups such as the National Labor Committee pushed them to do so.

Bass said he decided not to publicize the names of the factories he uses for competitive reasons. After spending so much time and effort finding factories that meet his high standards, he doesn't want to give the names to others that he expects will start competing fair trade retail companies.

Bass also said that he attempted to work with TransFair USA to get certified but that the agency wasn't ready to deal with apparel certification.

Kernaghan said he would expect a company seeking to make a fair trade marketing claim to make connections with and seek advice from human rights groups that exist in many Third World countries. The independent rights groups are knowledgeable about factory practices in their area because they have the trust of local workers, he said.

Marketing and retail experts say, however, that claims of fair trade practices do resonate with consumers.

"It's absolutely a marketing hook to claim a product is fair trade or organic," said Gene Laczniak, professor of marketing at Marquette University, pointing to the big increase in the sale of fair trade coffee in recent years.

"The problem with this whole business is certification," Laczniak said, noting that audits of some free trade coffee operations have found problems. Even so, there is a segment of the population willing to pay a premium price for items they believe to be "fair trade," to assuage their conscience, he said.

Anne Brouwer, a partner at McMillan & Doolittle, a Chicago retail consulting firm, said that while many people say they will pay more for fair trade items, there are also a lot of consumers who put those values aside when confronted with a lower-price option.

"I don't think consumers are nearly as educated about fair trade as they are on organic," Brouwer said.

Brouwer said she believes Fair Indigo will be successful if their prices are competitive and fashions are appealing.

Bass said he's able to keep prices in a competitive range even though he pays above minimum wage rates to his suppliers by dealing directly with factories, not spending money on advertising, and keeping operating expenses low. He also has pledged to donate 5% of profits to his Fair Indigo Foundation to support educational opportunities in countries where he sources products.

Fair Trade has 20 employees in Middleton, where the headquarters and distribution center is located.

"This isn't just marketing hoo-hah," Bass said. "It makes a difference to people."

Copyright (c) 2006, Milwaukee Journal Sentinel
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