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The Children’s Place is Funding a Childcare Center in Ethiopia, But Is It Enough?

The Children’s Place has linked arms with a girls’ and children’s rights charity to establish a first-of-its-kind early childhood development center at Ethiopia’s mammoth Hawassa Industrial Park, where women make up the vast majority of its workforce. If gender equity in the garment industry is to be a reality, the children’s wear giant said, access to safe, reliable childcare is “essential.”

While mothers worldwide bear the brunt of childcare responsibilities, the burden is especially acute for garment workers, most of whom are women in the prime of their reproductive years. Not only does anxiety over the safety and security of their pre-school children result in absenteeism, lower productivity and higher turnover, experts say, but the dearth of affordable, accessible childcare can also impede long-term, equitable participation in the workplace. “Investing in childcare solutions can provide significant benefits to women workers and bolster other investments to increase women’s economic empowerment,” BSR, a nonprofit sustainable business champion, noted in a 2017 business brief.

Plan International, which has operated in Ethiopia since 1995, is an experienced partner, having already erected 51 similar centers across the country. The new center will commence in earnest next August, building upon Plan’s “strategic efforts” around worker wellbeing and gender equity at Hawassa, where it has been a presence since 2019. The Children’s Place, which has contracts with many suppliers and vendors in the 1.3 million-square-foot park, will fork out funding for the center. At full capacity, it’s expected to provide an inclusive, “holistic” learning space for 1,000 children aged 0-6 and their caretakers.

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“This early childhood development center initiative will help to improve the lives and wellbeing of apparel factory workers and their children,” Jane Elfers, president and CEO of The Children’s Place, said in a statement. “We know that access to safe, dependable childcare and early education opportunities are critical to transforming the lives of children and contribute to gender equality and economic independence for women.”

Plan said the center will work to prioritize workers’ needs, such as offering staggered hours for early, midday and evening shifts. Providing essential services aside, Plan’s Ethiopian team will also use the facility as a conduit for job creation, recruiting, training and certifying staff from nearby communities in early childhood development.

“We are thrilled to bring The Children’s Place on board as our latest partner in support of girls’ rights and gender equality,” said Shanna Marzilli, chief marketing officer at Plan International U.S.A. “Our partnership holds great promise for breaking down barriers for women, who represent the majority of the global apparel industry, and their children, to achieve their full potential. Through this investment in early childhood development and care, we hope to inspire other businesses to think strategically about how best to support worker wellbeing and gender equality around the world.”

‘Wages, not charity’

While providing a haven for young children is a positive development, labor campaigners say it fails to make up for the millions of dollars worth of orders that The Children’s Place reportedly struck from Ethiopian suppliers at the start of the Covid-19 pandemic last year, driving companies into debt and subjecting workers to wage theft and job losses. Ethiopian workers are the garment industry’s lowest paid, earning $26 a month, compared with $95 in Bangladesh and $326 in China, according to a 2019 NYU Stern Center for Business and Human Rights study.

Suppliers told the Guardian last August that the Gymboree owner canceled orders from Ethiopia in March and delayed payments for six months for orders completed in January and February, citing force majeure clauses in their contracts. They also claimed The Children’s Place demanded retroactive discounts on products that had been shipped before the outbreak. Speaking to the outlet, Gregory Poole, The Children’s Place’s chief supply chain officer, said the company canceled fewer than 3 percent of its orders in Ethiopia and that it’s current on all vendor payments in the country. The retailer also increased its Ethiopian 2020 order volume by double digits.

The Children’s Place remains, however, in the “naughty” column of the Worker Rights Consortium’s Covid-19 tracker, which lists brands that have and haven’t coughed up in full for completed and in-production clothing orders.

Ayesha Barenblat, founder and CEO of fashion advocacy group Remake, said that The Children’s Place has refused to commit to paying in full for the orders it canceled at the outset of the pandemic and that it has not been transparent about the status of its order cancelations despite repeated attempts at engagement.

“As a major buyer from Ethiopia, we are concerned that its order cancellations have caused thousands of workers to lose their jobs or go without their full regular wages for months in a place where workers are already hand to mouth,” she told Sourcing Journal. “Anything like childcare centers or transport are wonderful additions to worker wellbeing but fundamentally what workers need first and foremost for themselves and their children is income security. Garment makers need their wages, not its charity.”

When reached for comment, a representative referred Sourcing Journal to a statement on The Children’s Place’s website noting that the retailer has been working collaboratively with its vendors over the past several months to compensate them for in-production and finished orders that were canceled last spring.

“Consistent with our history of collaborative vendor relationships and our commitment to the wellbeing of garment workers at our third-party factories, we worked closely with our vendors throughout the pandemic, including by continuing to provide order flow, to help lessen the financial and human impact of the pandemic and to position ourselves, our vendors and their workers for a sustainable recovery from the pandemic’s devastating global effects,” the statement read. “The orders are shipped or in the process of being shipped, and full payment has and will be made on all of these orders. With respect to raw materials, we are working collaboratively with our vendors to repurpose all remaining raw materials. We are current on payments with our vendors in accordance with payment terms agreed to by our vendors.”

Earlier this month, The Children’s Place reported a fiscal second-quarter net income of $24.1 million, compared with a net loss of $46.6 million the same time last year. Net sales increased 12.2 percent to $413.9 million in the three months ended July 31, 2021, while its operating income spiked $102.3 million to $37.8 million.

“We delivered another outstanding quarter with gross margin, operating margin and [earnings per share] all at record levels,” Elfers said on an earnings call. “We experienced a significant acceleration in back-to-school sales during the last two weeks of July, and the third quarter is off to an outstanding start. We continue to operate at a high level, while navigating the ever-changing Covid landscape. We remain firmly on offense and we look forward to continuing to deliver accelerated operating margin expansion for 2021 and beyond.”

Editor’s note: The story was updated at 2.23 p.m. to include a response from The Children’s Place.