Sustainable Fashion & Social Entrepreneurship in Haiti
Case Abstract:The Local Buttons case is set during December 2012 through January 2013 as the co-founders are examining the beginning of their second year as a fashion startup. The case presents the main issues that are influential in the co-founders’ decision to expand their business to U.S. consumers and seek an alternative manufacturing solution for their planned expansion. Local Buttons had relied on contracting their apparel production with a Haitian non-profit and while this arrangement aligned with the ethical and sustainable mission of their business, they were constantly presented with larger infrastructure issues associated with Haiti’s apparel manufacturing sector.
After a long night of networking and showcasing their new line of Haitian-made, upcycled fashion on the west end of Toronto, the Local Buttons team went to School with a professor. School was an eclectic brunch spot in Toronto and the professor had come from Cornell to find out more about the fashion startup. As they sat around the bustling breakfast table in Toronto during the fall of 2012 to educate the professor about their business model and plan their next visit to Haiti, the Local Buttons team was at a pivotal decision point with their fashion business.
Their line of professional clothing made from the secondhand clothing imports found in Haiti’s open markets was gaining a fashion following in Canada and they needed to evaluate the opportunity for expansion and selling their products in the nearby United States. They would need more volume and consistency in their garments, so they also needed to make a strategic production decision in order to ensure timely delivery of the new items they had debuted the night before.
Local Buttons was only a year old in 2012 and the success of a new fashion line can be intimidating even for the most talented of designers, but Anne Pringle and Consuelo McAlister were not fashion designers, they were international development majors with a vision to bring sustainability and social responsibility to the global fashion industry.
This section of the teaching case tells the dilemma or decision facing the decision-makers.
Local Buttons Inc. was founded in 2010 by Consuelo McAlister and Anne Pringle, graduates of International Development Studies at York University in Canada. Upon graduation in 2009, McAlister and Pringle were looking for meaningful work and needed a new wardrobe of professional clothing. While interviewing (and shopping), the two realized that there was a gap in the market for sustainable and affordable professional wear. Their budgets were limited and frustration set in as they were forced to consider clothing choices contrary to their strong socially conscious viewpoints. They spurned the conventional fast fashion model that relied on unsafe working conditions, low wages, and manufacturing processes that were detrimental to the environment, and the duo set out to create the clothing they wanted to wear. Their new interest in ethical fashion also intersected with a global tragedy.
In 2010, following the devastating 7.0 magnitude earthquake on January 12th in Port-au-Prince, Haiti, McAlister and Pringle hosted a sustainable fashion show in Toronto, Canada to showcase local sustainable designers in order to raise money for Brandaid, a company working with artisans in Haiti. Following the success of the show, Brandaid co-founder, Cameron Brohman, informed McAlister and Pringle of the impacts generated by the dumping of second hand clothing in developing countries like Haiti. Their international development radar was piqued – soon after their discussion with Brohman, McAlister and Pringle set to work with Brandaid to address this issue. They brainstormed fashionable ways to upcycle (McDonough and Braungart 56-57) the second hand garments found in Haiti and soon struck upon a stylish solution.
In 2010, Brandaid introduced McAlister and Pringle to Hans Garoute of the National Institute for the Development and Promotion of the Sewing Sector (or INDEPCO). INDEPCO was a Haitian-based non-government organization (NGO) supported by USAID and the Clinton-Bush Haiti Fund and its president, Hans Garoute, worked to promote the national garment industry. INDEPCO also served as a training center for workers seeking employment in the garment sector, including a newly developed industrial park, Caracol, funded by both the United States and ($124M) and the Inter-American Development Bank ($55M), in northern Haiti. INDEPCO was not a factory by the traditional definition for the apparel industry; rather it was structured more as a co-op with members who worked in the manufacturing facility. Hans secured contracts for large apparel orders (usually from the Haitian government or local businesses) and distributed the work to the members of INDEPCO for production. This sub-contracting system allowed INDEPCO to leverage the skills of Haiti’s small and mid-size workshops to increase the quality and value of apparel produced in the country.
With their basic knowledge of Pepé in Haiti, Anne and Consuelo traveled to Port-au-Prince in November of 2010 to meet with Hans. His non-profit model aligned with their desire to produce a sustainable and responsible collection of professional clothing and they began production in February of 2011. Hans proved to be an integral part of Local Buttons’ entry into the Haitian garment manufacturing sector, providing the space and labor for Local Buttons to develop their first line of upcylced clothing in 2011.
In Haiti, secondhand clothing is called pepé (grandfather) alluding to outdated clothing styles that would be worn by one’s grandparents. It is also known as kennedy and reagan—a reference to the US administrations that implemented trade policies facilitating the export of secondhand clothing (duty free) to developing nations as part of foreign aid. About half of the secondhand clothing in the United States is exported to lesser developed and developing countries, while the remaining amount is used for new raw materials and wiping cloths/rags (Hawley 43) . Most secondhand clothing from the US is exported to the nations of Africa and Latin America. The export of secondhand clothing from the US to lesser-developed countries has resulted in marketplaces solely dedicated to the sale of used clothing. As Hawley (43) explains, “much of the market for used clothing is located in developing countries where annual wages are sometimes less than the cost of one outfit at retail price in the United States. The developing country markets provide a venue where highly industrialized nations can transform their excessive consumption into a useful export. For many of these people, used clothing surplus provides a much needed service”. According to the United Nations, the global trade in secondhand clothing is over $4 billion, with the United States as the larger exporter to the global market (UN Comtrade) . In addition to cost savings for consumers in lesser developed countries, apparel recycling diverts waste from landfills, and while this has environmental benefits it can also have a negative impact on developing economies. Opponents of the importation of secondhand clothing to these nations argue that the used, cheaper clothing undermines development by hampering economic growth that could be derived from domestic apparel production and consumption (Brooks and Simon) .
In 2010 Anne and Consuelo officially founded the company “Local Buttons: Catalysts for Sustainable Enterprises” with the simple mission to create more conscious avenues for consumers to access beautiful goods that were both sustainable and ethical.
 McDonough, William, and Michael Braungart. Cradle to Cradle: Remaking the Way We Make Things. New York: North Point Press,2002. Print. Upcycle refers to the process of adding value to a product of lesser value, and is described as an alternative recycling solution
 Hawley, Jana. “Textile Recycling As A System: A Micro/Macro Analysis.” Journal of Family and Consumer Sciences 92.4 (2000): 40-43.
 United Nations Commodity Trade Statistics Database. Web. August 2014 http://comtrade.un.org/db/default.aspx
 Brooks, Andrew and David Simon. “Unravelling the Relationships Between Used-Clothing Imports and the Decline Of African Clothing Industries.” Development and Change 43. 6 (2012): 1265-1290. doi/10.1111/j.1467-7660.2012.01797.x/pdf
THE CASE This section of the teaching case provides all the background information needed to understand the situation. It includes a description of the main players, the state of the organization and any financial or other information needed to analyze the situation.
Nonetheless, sustainability in fashion is a growing trend, with retailers and designers taking note and addressing both the environmental and social impacts generated at different points in their supply chains. Major retail conglomerates such as H&M, Levi’s and Top Shop now feature environmentally friendly clothing choices. Retailer take-back programs that encourage consumer recycling are also on the rise. Fast fashion giant, H&M, partnered with I:CO, a leader in textile recycling, to launch their in-store take back program and by the end of 2013, all H&M retail locations were equipped with consumer recycling boxes (www.hm.com). Large-scale apparel reuse models are used by both Patagonia (Common Threads) and Eileen Fisher (Green Eileen) to recapture the potential waste of their own products and upcycle or recycle them into another phase of use by consumers.
The Local Buttons business model was based on sustainability and integrity in providing value for their consumers and producers alike. Local Buttons created professional wear for both men and women made from up-cycled materials sourced directly in Port-au-Prince, Haiti. The designs were inspired by Toronto street-style and influenced by Haitian culture. Manufacturing was done entirely in Port-au-Prince, Haiti. When garments were completed, each small-batch order was mailed, via DHL, to the Local Buttons headquarters in Toronto, Canada. The Local Buttons manufacturing model attempts to use the most of their fabric as possible, with scraps being used to make accessories, like handbags, or used as stuffing for pillows for the chairs at the factory.
Local Buttons sourced second hand materials for their collection, finding new ways to reinvent the old. The process of manufacturing the clothing began with a sourcing trip to the local secondhand market (or marché) in Port-au-Prince. Anne and Consuelo personally scoured the market looking for suitable clothing items that could be repurposed for their clothing line (see Figure 1). Hours were spent visiting various vendor stalls and using their French-speaking skills to negotiate the best price for their finds. Their system for selecting garments included rapid quality assessments for stains or tears, color coordination for darker shades that would be suitable for professional clothing, and style selection of large-sized men’s blazers which were the most appropriate style for their new garments given both the amount and quality of the fabric that could be reused. Once they had made their final selections, they took the garments to INDEPCO for sorting by style and shade and then the garments were laundered in preparation for production (see Figure 2). The production process for upcycled clothing was quite different from the initial stages of production for clothing using new materials. Instead of starting with flat, textile yardage that needed to be unrolled and cut to design specifications, the Local Buttons process started with the disassembly of the secondhand garment. After the garment was completely taken apart at the seams, the patternmakers and tailors were able to identify the best pieces of the deconstructed garment to be used for the new Local Buttons designs. Apparel factories are normally dedicated to the assembly of new garments from new fabrics, so the Local Buttons process of disassembly was not necessarily an efficient process for garment workers trained to only do assembly work, but the team of INDEPCO workers eventually became very skilled at the deconstruction process and were able to infuse their own creativity into the pieces designed by Anne and Consuelo (see Figures 3 and 4).
Each Local Buttons creation is driven by style and integrity. The ethical backbone of the company incorporated fair wages, a hot lunch program, and a transportation stipend for the tailors. Local Buttons wanted to pioneer an international movement of refurbishing pépé clothing in Haiti. Woven into each product was the compelling history of Haiti’s clothing industry and how it tied into the global fashion market. Local Buttons sought to bring an inside view on the manufacturing process and sustainable design.
Local Buttons’ first designs included men’s and women’s blazers and vests as well as accessories. By the end of 2012, they had expanded into to skirts and bow ties, and in 2013 into hand beaded bags and jewelry made from up-cycled oil drums.
Local Buttons’ design process was a collaborative process influenced by Canadian and Haitian styles. McAlister and Pringle determined pattern, style and color scheme for the upcoming season, but left room for collaboration with tailors in Haiti. McAlister made the final drawings and sketches for each design. Local Buttons hired out pattern making, hiring local pattern makers in Toronto before partnering with a student design team at Cornell University in 2013 to draft patterns for their 2014 line. Samples were made first at the Local Buttons’ Design Lab facility in Port-au-Prince, with McAlister and Pringle present in Haiti to address any issues with quality and fit. The color scheme was chosen each season by McAlister and Pringle, however, Local Buttons gave room for creativity by tailors in Haiti for selecting color combinations appropriate for the final garments (see Figures 6 and 7).
Selling Upcycled Fashion
Local Buttons defined its customer as a style conscious professional between the ages of 25-49, with a modest disposable income for investing in quality-made clothing. Local Buttons customers were skewed towards women (about 65% of customers). These customers were looking for unique and well-made clothing that would complement their existing wardrobe. The Local Buttons customer was looking for style and quality first — the ethical and social components were a value added appeal for this customer (see Table 1 for pricing information).
With their headquarters in the cosmopolitan city of Toronto, Local Buttons was able to sell its Haitian-made clothing in a variety of fashionable settings. However, there were other Canadian designers appealing to the eco-conscious consumer (see Figure 5). Direct competitors for Local Buttons included trendy boutiques and independent designers like Preloved, Thieves, Meemoza, Rescued, (rescued-designs.com), Sarah Stevenson (www.sarahstevensondesign.com) , Nicole Bridger (www.nicolebridger.com/), JOOL (www.walkwithjool.com) and Paper People Clothing (paperpeopleclothing.blogspot.ca). These Canadian companies featured eco-friendly and/or refurbished garments for young professionals. Local Buttons, along with above mentioned designers, belonged to Fashion Takes Action (FTA), an organization promoting sustainable and ethical fashion designed in Canada. Local Buttons participated in pop-up stores and local markets with JOOL, Meemoza, Preloved, Paper People Clothing and Rescued. Larger competitors were more recognized U.S. brands like Banana Republic, Club Monaco and Anthropologie which also catered to fashions for the young professional.
Local Buttons differentiated itself from other designers and brands targeting young professionals by emphasizing their business model — as the only company that breathed new life into second hand clothing by creating new garments that were refurbished and refined in Haiti. As part of its branding, Local Buttons exposed the consumer to the intriguing story of Haitian culture and the growth of sustainable tailoring jobs in Port-au-Prince. Both Anne and Consuelo attended all selling events and served as brand ambassadors for Haitian-made, sustainable fashion. In 2012 and 2013, FTA hosted a sustainable designer showroom in Toronto, where Local Buttons sold their vests and blazers through the retail store as well as hosting a number of pop-ups at the showroom throughout the year. Local Buttons took part in local Toronto design shows, along with other emerging Canadian designers and hosted their own pop-ups at cafes and corporate offices throughout the year.
Haiti’s geographical proximity to the United States and low wages had made it a major garment exporter for U.S. brands like the Gap and Levi’s during the decades of the 1960s, 1970s and 1980s. At its peak in 1980, the apparel industry provided an estimated 100,000 jobs for Haitians. A military coup in 1991 that overthrew the newly elected President Aristide, led to the imposition of a trade embargo by the Organization of the American States (OAS) for all Haitian exports. The embargo lasted from 1991 to 1994 and severely damaged the Haitian economy, including the apparel manufacturing sector . Many manufacturers closed and employment numbers are currently around 30,000 for apparel manufacturing, a fraction of the pre-embargo levels.
With a per capita GDP of $1,300 (in 2013), Haiti is the poorest nation in the Western Hemisphere with nearly 70% of its population living in poverty. Apparel is the nation’s major export ($803 million in 2013) and the United States is Haiti’s largest trade partner – importing over 80% of its exports. The daily minimum wage for apparel workers is set at 200 Haitian gourdes (about US$ 4).Prior to 2009, the daily minimum wage had been $US 1.80 and after protests and political pressure, then President René Préval, agreed to the raise the wage to the equivalent of US $5 a day with an exception for the apparel sector. For apparel workers the minimum wage was raised to $US 3.25. The sector is unique since oftentimes, workers are paid at a piece rate and manufacturers in Haiti argued that many of their skilled workers already earned a daily wage exceeding the newly established rate.
Since the 2010 earthquake, the US government has encouraged apparel companies to choose Haiti as a sourcing option for CMT (cut-make-trim) apparel production, which primarily involves the assembly of garments from imported fabrics. Haiti lacks manufacturing capabilities for inputs, like fabric and yarn, so these components require importation and the United States has specifically targeted apparel manufacturing as a sector for development. The US has implemented agreements such as the Haitian Hemispheric Opportunity through Partnership Encouragement (HOPE) Act in 2006 and 2008, as well as the Haiti Economic Lift Program (HELP) Act of 2010. This trade legislation allows duty-free access for apparel made in Haiti to the US market and all provisions have been extended through 2020 to allow Haiti’s apparel sector time to stabilize and grow.
Provisions of these agreements also stipulate that Haiti must show evidence of protecting worker’s rights in compliance with standards of the International Labor Organization (ILO) in order to maintain its preferential trade status. Any manufacturers exporting from Haiti must also comply with the standards in order to maintain duty-free access to the U.S. To support this effort, the ILO’s Better Work program, which establishes an independent factory monitoring system, has been implemented as the Better Work Haiti program. The goal of the program is to improve factory working conditions and is funded by the US Department of Labor.
The International Labor Organization (ILO) released its Better Work Haiti: 8th Biannual Synthesis Report Under the Hope II Legislation in April 2014, with the support of Canadian and American economic and human resource departments. This report for the garment industry included evaluations of 27 factories employing 29,292 workers. The report indicated that the factories were compliant with payment of established wages but non-compliance with safe working conditions was a major issue. 96% of factories were non-compliant with working environment factors such as excessive heat, adequate lighting, and safe noise levels. Over 70% of the factories were non-compliant in worker protection against hazardous equipment as well as emergency exit access.
Video Clip: Final Thoughts
 Hethorn, Janet, and Connie Ulasewicz. Sustainable Fashion Why Now?: A Conversation About Issues, Practices, and Possibilities. New York: Fairchild Books, 2008. Print
 Hornbeck, J.F. The Haitian Economy and the HOPE Act. CRS Report for Congress June 4 2010. Web. May 2013 http://fpc.state.gov/documents/organization/145132.pdf
 CIA World Factbook. November 2014. https://www.cia.gov/library/publications/the-world-factbook/geos/ha.html
 Hornbeck, J.F. The Haitian Economy and the HOPE Act. CRS Report for Congress June 4 2010. Web. May 2013 http://fpc.state.gov/documents/organization/145132.pdf
 International Labor Office and International Finance Organization. Better Work Haiti: Garment Industry 8th Biannual Synthesis Report Under the HOPE II Legislation. Geneva, ILO 2014. Web. November 2014 http://betterwork.org/global/?p=4002
KEY QUESTIONS In this part of the teaching case, the key discussion questions are outlined. These questions do not have black and white answers and are intended to guide discussion rather than lead to a specific response.
Apparel Production in Haiti
Anne and Consuelo created Local Buttons as a lifestyle brand committed to establishing Haiti’s reinvigorated garment industry as a place where ethical and sustainable standards of labor and manufacturing were upheld. They were committed to creating sustainable jobs that developed the capacity of tailors to greatly advance their skills and livelihoods, Local Buttons sought to provide a connection between the consumer and the producer with their fashion collections. While their mission and commitment to working in Haiti was unwavering, the challenges of running a fashion business would begin to test their international development backgrounds.
Working in Haiti provided a number of challenges, in addition to those inherent to working in the fashion and apparel sectors (tight margins and deadlines). Haiti’s difficult transition to democracy, including the 1991 military coup and trade embargo slowed down the Haitian economy. The apparel industry was hard hit as many manufacturers closed and moved their factories to Asia. The slow return of the garment sector began in 1994, however Haiti’s lack of infrastructure continued to be an issue and resulted in difficulties for Local Buttons when it came to finding and repairing equipment. For example, in order to properly iron the fabric after garments were deconstructed, irons, ironing boards and heavy-duty covers needed to be imported along with a steamer. Haiti’s overall lack of apparel production supplies also limited Local Buttons ability to source basic production inputs like high quality fusing and pattern paper.
Additionally, the focus on low skilled labor and mass production of low quality garments in Haiti has resulted in an emerging workforce trained mainly in cutting and sewing or simple assembly. Because Anne and Consuelo were committed to hiring local Haitians to fill all positions they had a difficult time finding more skilled workers to fill middle management positions.
Addressing social issues in the Haitian apparel industry proved another difficulty. The standard minimum wage is very low, however, and Anne and Consuelo could not seem to find an available agreed upon livable wage standard for garment workers, making their goal of providing a fair wage difficult. The team attempted to address issues of pay, job security and workplace safety through their business model. Since both food and transport accounted for a great portion of workers’ salaries, Local Buttons implemented a daily hot lunch program and a travel stipend for their workers to travel to and from the factory. Implementing social responsibility was an ongoing process for Anne and Consuelo and one that they were constantly evaluating as part of the costs for their fashions. However, communicating this process to their customers proved difficult since it was not easy for them to market intention and growth.
Video Clip: Haiti Has Potential in Apparel Design
Design and Upcycling Process
Upcycling the garments was a labor intensive process. Materials presented the greatest challenge for Local Buttons. Each garment had to be handpicked, washed and disassembled before being cut and fitted for a new garment. Disassembling garments, done by hand, is labor intensive work, requiring large amounts of storage for each individually packaged bundle of material. In addition, Local Buttons was limited to the selection of fabrics found among the secondhand garments in the local ‘pepe’ markets and they found sourcing quality materials difficult. There was also a prevalence of garments made of blended fibers (i.e. cotton and polyester) which made recycling a garment back to the original fiber state for use in a new textile virtually impossible. Since Local Buttons considered its entire lifecycle, including the end-of life of its garments, using blended textiles presented a difficult downside for its business model.
Bound by the materials found in the markets, Local Buttons found it difficult to be on trend with their color selection each season. A key feature in the Local Buttons line was the uniqueness of each piece. No one piece was alike due to its material composition, and while this provided a unique selling point to consumers; it made merchandising and selling the collection difficult for retailers and for Local Buttons at trade shows in Canada. The majority of materials sourced for the Local Buttons line were men’s suit jackets, pants and dress shirts since they were often the largest, providing the most material to up-cycle. However, men’s wear was not produced with fibers (like spandex) that allow for a degree of stretch, which made it difficult to upcycle the secondhand clothing into women’s fashion. For garments that were found with stretch, the variability in the amount of stretch by garment led to sizing inconsistencies.
Distribution in Canada
The Canadian apparel industry is a relatively small industry due to the size and scope of the Canadian population. In addition, emerging Canadian designers often find it difficult to break into the retail scene, as retailers are typichttps://dmig.dyson.cornell.edu/blog/case-study/local-buttons-sustainable-fashion-social-entrepreneurship-in-haiti/?preview=trueally conservative and reluctant to give new designers, without any recognition or following, a chance. As a result, small designers often find themselves looking to sectors and markets outside of Canada to launch their line. Canadians spend an estimated $21.5 billion on clothing and accessories each year (Stats Canada). By comparison, Americans spend about $200 billion on clothing and accessories (www.census.gov), nearly 10 times the amount as Canadians. So, the proximity of the United States to both Canada and Haiti made it an ideal market for Local Button’s products.
Local Buttons faced an additional challenge to selling their line in Canada due to the limitation of their fabric choices, which were determined by the unpredictable supply of secondhand clothing in Haiti. Canadian retailers often looked for a full size run of the same style and color. However, Local Buttons was only able to offer color schemes (similar shades of a color), and could not offer a full size run in a single color or material.
As a startup fashion business without a brick-and-mortar location, Anne and Consuelo realized the value of having an online presence. The offered online sales of their clothing styles, but had to shift the focus to accessories, since their line of tailored jackets and vests were difficult to sell online. This was largely due to Local Buttons’ position as an emerging brand and consumers were reluctant to purchase a fitted, tailored piece online since they were unfamiliar with the brand’s sizing. Furthermore, due to the uniqueness of each piece, Local Buttons found it difficult and time-consuming to host their entire product line on their website since each garment had to be photographed, edited and loaded onto the site. This was a time-consuming task and it was difficult for Anne and Consuelo to continuously find time to promote their line at events and to also update the site with new items.
Unlike the United States, Canada did not have a series of free trade agreements to regulate their trade with Haiti. But basic provisions of Canadian trade with Haiti allowed for Local Buttons’ garments to be exported from Haiti duty free. Garments were only subject to a 5% Goods and Service Tax (GST) upon import into Canada. Additionally, Local Buttons was able to label their garments as ‘refurbished materials’ without having to identify the exact percentage of fiber content for the upcycled garments (see Figure 8). This would not be the case as Anne and Consuelo explored the requirements for export of Local Buttons’ products to the United States, which had stricter labeling laws for imported apparel.
While Canada had served the beginnings of Local Buttons very well, Anne and Consuelo really wanted to expand their line and reach their neighbors to south. The United States represented a much larger market for Local Buttons and Haiti was already a preferred trading partner for apparel imports. The benefits were obvious but the challenges had already started to emerge as they planned their U.S. debut. Should they move ahead or rethink the limitations of their sustainable fashion startup? (see Exhibit A for financial information)
 Statistics Canada. Retail and Wholesale Trade. The Governemnt of Canada, 2012. Web. October 2014 http://www.statcan.gc.ca/pub/11-402-x/2012000/chap/retail-detail/retail-detail-eng.htm?fpv=60000
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The case is suitable for use in courses focused on Organizational Behavior, Change Management, Family and/or Small Business Management, Leadership, Strategy, and Marketing.