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Fabletics Exec ‘Cautiously Optimistic’ on Lesotho Factory Remediation

Fabletics courted headlines last summer after nearly 40 workers at one of its suppliers in Lesotho complained of rampant sexual and physical abuse that left them in a state of constant anxiety and stress. Three women accused their male supervisors at Hippo Knitting, a factory located in the southern African country’s capital city of Maseru, of sexually assaulting them, while more than a dozen said daily searches by supervisors frequently left their underwear and vulvas exposed.

The revelations, made by Time in partnership with The Fuller Project, a global nonprofit newsroom that focuses on women’s issues, made it “crystal clear” that Hippo Knitting needed to make a “serious and binding commitment to thoroughly overhauling the way it views and treats its workers,” Meera Bhatia, president of expert services for the brand, which actress Kate Hudson co-founded in 2013, told Sourcing Journal.

Even though Fabletics could have bumped production to one or more of the other 50-plus factories it works with, Bhatia said the label didn’t want to leave Hippo Knitting’s 1,000 workers in the lurch. Since then, Fabletics has “worked diligently” to “chart a new path forward” for the factory with local unions and Africa Rising, a human-rights organization founded by Ndaba and Kweku Mandela, grandsons of Nelson Mandela.

The resulting 39-point corrective action plan included a new grievance procedure for reporting workplace violations, a new anti-intimidation and anti-retaliation policy, a new process for non-invasive searches in dedicated privacy screening areas and a new third-party grievance line for complaints relating to security searches. Supervisory and human-resources personnel began receiving regular training on their role in protecting worker rights by organizations that Fabletics and Africa Rising identified and vetted.

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Since production at Hippo Knitting kicked back up in August, personnel from Africa Rising have been on-site during working hours to oversee the plan’s implementation, Bhatia said. Re Mmoho Compliance Solutions, a Lesotho-based nonprofit that specializes in social and environmental compliance, provides an “additional layer” of oversight by ensuring that workers are receiving the full benefits, rights and training to which they are entitled, she added.

“Fabletics made a commitment to only allow Hippo Knitting to restart production of the company’s products when a safe and healthy workplace could be assured for all,” Bhatia said. “We are cautiously optimistic with the progress, although much work remains to be done by Hippo Knitting to consistently execute on the 39-point plan and earn back our trust. Ensuring worker protections and wellbeing requires constant vigilance, and only time will tell how effective our approach has been. But we take pride in the fact that we confronted the issue head-on and rallied various stakeholders together on solutions.”

Fabletics took a different tack to Levi Strauss and Wrangler owner Kontoor Brands when they faced similar gender-based violence and harassment allegations at Nien Hsing, one of Lesotho’s largest garment manufacturers, in 2019. The brands, together with Nien Hsing, ended up working with Lesotho trade unions, women’s rights organizations and labor groups to create the Lesotho Agreement, a binding pact that not only initiated a worker-led overhaul of programs relating to sexual harassment and abuse but also supplies signatories with legal restitution should any of the terms fall unmet. Although Fabletics said it had considered signing the Lesotho Agreement, it ultimately decided to craft its own framework.

“We were deliberate in taking our time and consulting with a range of sources—including government officials, independent experts, the workers’ representatives, leading NGOs like Africa Rising and other manufacturers—and it resulted in building a comprehensive, sustainable roadmap for the future that explicitly addressed the unique issues and challenges at Hippo Knitting,” Bhatia said. “The corrective action plan spells it out without equivocation: Hippo Knitting is on extremely thin ice and we will take immediate action if we spot any sign of management’s failure to follow the plan. The key is that we and third-party monitors are vigilantly watching Hippo Knitting.”

But Rola Abimourched, deputy director of investigations and gender equity at the Worker Rights Consortium, which helped broker the Lesotho Agreement, said that Fabletics’ approach still falls short.

“We do not see Fabletics’ strategy as sufficient to address gender-based violence and harassment at the factory,” she said. “Fabletics has not made any binding and enforceable commitments, the Lesotho unions and women’s rights organizations are not involved in the design of the program or its implementation, and workers cannot take their complaints to an independent entity that can investigate complaints and issue determinations.”

Bhatia said, however, that progress is happening. “Much of the corrective action plan has already been put into place and we have confirmation of completion, such as the development of new policies on grievance reporting, anti-intimidation and anti-retaliation and non-invasive searches of workers, as well as training for managers and workers conducted by third-party experts,” she said. “We’ve received reports from the training, seen the policies, confirmed that they’ve been delivered in writing to workers and are hearing from monitors about activity on a regular basis. We’re also paying close attention to HR reports on grievances and employment to ensure the plan continues to be followed.”

Fabletics flexes physical footprint

While Fabletics is addressing conditions in its supply chain, it’s also laying the groundwork for a significant retail expansion this year.

The California-based label is planning to open 30 new stores before 2022 comes to a close, with the first 18 in Chandler, Ariz.; Arcadia, Calif.; Corte Madera, Calif.; Glendale, Calif.; Sherman Oaks, Calif.; Valencia, Calif.; Walnut Creek, Calif.; Louisville, Ky.; Kansas City, Mo.; Raleigh, N.C.; Omaha, Neb.; Albuquerque, N.M.; Cincinnati, Ohio; Westlake, Ohio; Oklahoma City, Okla.; Germantown, Tenn.; Murray, Utah; and Wauwatosa, Wisc.

Fabletics recently hosted a “Grand Re-Opening” in the 21 locations that have opened since early 2020, when the Covid-19 pandemic forced nonessential retailers to shutter for months at a time. Store visitors encountered fitness demos, special promotions and music from local DJs, the kinds of experiences that were off limits before Covid restrictions were recently lifted.

These locations offered 40 percent discounts on all in-store purchases including the new loungewear line. The first 100 customers who made a purchase received free women’s or men’s shorts.

“Fabletics has proven that shoppers want the flexibility of both in-store and online shopping,” Fabletics co-founding CEO Adam Goldenberg said in a statement. “Despite the challenges we faced during Covid-19, we see a rebound on the horizon for retail and are doubling down on expansion efforts in response. We’ve chosen new locations based on growing demand from our members in these areas and can’t wait to bring the brand closer to our customers’ homes.”

The new openings come months after Fabletics, which counts more than 2 million VIP members, broke ground in Europe for the first time with a store in Berlin. Across the U.S., Canada and now Europe, Fabletics’ footprint totals 75 stores.

Fabletics is not alone in expanding its physical reach. Abercrombie & Fitch said it will open 20 net new stores in 2022, marking the first time since 2008 the retailer will have more stores at the end of a year than the beginning. Ralph Lauren opened more than 40 stores in the 2021 second half, planning “about a dozen” more in North America in the next few years. And teen retailer Tilly’s unveiled plans to open 15 to 20 stores this year.

Some of the clothing chains seeing the largest physical growth include off-price giant Ross Stores, which will open 100 locations across its Ross Dress for Less and dd’s Discounts banners in 2022. Target said it will open 30 more stores this year after surpassing $100 billion in 2021 revenue.

Fabletics has focused on the “omnichannel” buzzword as part of its offering as it seeks to bridge the gap between online and in-store. All new locations will be equipped with the brand’s proprietary OmniShop technology that offers an online-to-offline platform for customers and store associates.

OmniShop helps store staff analyze in-store shopping behavior, make necessary adjustments and even apply real-time feedback to the brand’s overall operations.

“The commitment of our associates and loyalty of our customers across the stores we opened during the past two years deserves to be celebrated,” said Ron Harries, senior vice president, head of retail, Fabletics. “Our associates are excited to bring members and new customers back in stores and show off the latest and greatest from Fabletics. We believe the future of retail is more exciting than ever and look forward to showing shoppers why.”

Fabletics stores are powered by the company’s proprietary enterprise retail management engine, OmniSuite, to serve as the backbone of its e-commerce, order management and POS capabilities. This system is built so the retailer can track sales conversion from the physical fitting room to the online cart and carry users’ preferences across channels, ideally giving shoppers a more personalized experience wherever they shop.

When Fabletics revealed a slate of store openings last March, plans included connected fitness boutiques as part of its collaboration with at-home rowing machine Hydrow. It wasn’t immediately clear if any of the new stores will include these experiences.

Some of the company’s tech-driven stores also introduced the Fabletics “Legging Finder” interactive touchscreen tool, which enables shoppers to answer a quiz to learn which legging styles best suit their needs and preferences. Large video installations and additional touchscreen technologies allow shoppers to view Fabletics products on real people to get an idea of both fit and functionality.

Operating as part of the TechStyle Fashion Group portfolio of brands, which also include Savage X Fenty, JustFab, ShoeDazzle and Fabkids, Fabletics was the subject of IPO chatter in July 2021. The athleisure retailer, which was reportedly aiming to raise nearly $500 million in the offering, has not confirmed go-public plans.