At Ted, we believe in being open and honest in the way we do business and operating in a fair and sustainable manner

Supply Chain Transparency and Modern Slavery Statement

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Published 4th April 2019

This is the third statement of Ted Baker Plc (“Ted Baker”) published in accordance with the Modern Slavery Act 2015 and the California Transparency in Supply Chains Act 2010 (the “Acts”). Ted Baker has published an annual modern slavery statement since March 2017; to view these statements click here. At Ted Baker we are committed to being open and honest in the way we do business. This includes doing the right thing by all stakeholders throughout the supply chain, operating in a fair and sustainable manner and protecting the people who create Ted Baker products.

To ensure modern slavery does not take place in any part of our business or supply chain we believe collaboration and raising awareness across all areas of the Ted Baker business is key; this statement provides an overview of the progress we have made over the past 12 months. ?

1. Ted Baker’s Business

Ted Baker is a global lifestyle brand with controlled distribution through three main channels: retail (including e-commerce), wholesale and licensing (territorial and product). In the financial year 2018/19 (“FY 18/19”), Ted Baker’s revenue was £617.4 million. Ted Baker directly employs over 3500 people worldwide including over 680 based in our head office, The Ugly Brown Building, in London.

Retail is owned and managed by Ted Baker and we retain full oversight of labour practices for our employees. Our wholesale trustees and territorial licensees are carefully selected partners who represent the Ted Baker brand within specific territories or channels. Our product licensees develop specialist products and are responsible for their supply chain. ?All such partners are subject to strict contractual conditions, including Ted Baker’s Code of Conduct (the “Code”). In the financial year, Ted Baker acquired No Ordinary Shoes Limited (“NOSL”) from its licence partner Pentland Brands.

As at today’s date, Ted Baker and its retail licensees has 560 stores and concessions worldwide, comprising of 201 in the UK, 122 in Europe, 130 in North America, 98 in the Middle East, Africa and Asia and 9 in Australasia. Combined with our diverse supply base, this significantly complicates the threat of modern slavery within our operations and requires strategies that are tailored to the needs of each area of the business and territory in which it is based.

High risk areas of the business are represented in a cross-functional committee, the Modern Slavery Act Working Group (“MSWAG”). MSWAG was established prior to the publication of Ted Baker’s first statement to critically assess and address Ted Baker’s objectives. The group includes a senior representative from every relevant department. The function of MSWAG will continue to develop with the changing needs of the business as we understand that meaningful impact can only be achieved through continued and sustained improvement.

2. Policies relating to Slavery and Human Trafficking

The offences contained within the Acts do not happen in isolation and require a wide scope of insight to fully prevent the actions that culminate in an individual being enslaved or trafficked. Ted Baker’s Code sets out the minimum working conditions and ethical standards demanded from our suppliers. ?The Code is based on international conventions such as The Ethical Trading Initiative Base Code and The United Nations Universal Declaration of Human Rights and the Acts; we revised the Code last in 2016 and in order to ensure that it remains relevant to the evolving issues in the industry we will revise it again in FY19/20 to ensure that it remains effective in our growing business.

The Code forms the core of our strategy to tackle Modern Slavery and can be found on our website.

Our direct (“first-tier”) suppliers are audited by independent third parties against the Code and we have a dedicated team, Ted’s Conscience, which works directly with the business and suppliers to continually improve our suppliers’ standards. Members of Ted’s Conscience and our production teams regularly visit factories to make sure our relationships are maintained, the standards of our Code are upheld and to recommend improvements.

3. Risk Assessment and Due Diligence as of FY18/19

Our supply chain consists of over 200 first-tier suppliers for our own product alone. Suppliers based in China make up over 50% of our first-tier and suppliers in Turkey and Portugal make up another 25%. In our previous reports, we identified China and Turkey as being our most significant risk due to both volume of product and socio-political circumstance.

In preparation of the acquisition of NOSL Ted’s Conscience and the production team visited the footwear factories in China, Taiwan, Vietnam and India. As Pentland Brands’ ethical standards uphold those set out in Ted Baker’s policies there are no improvement actions required to ensure they align with our Code.

Through ongoing consideration of risk factors, we have identified China and Turkey as territories that present the biggest challenges. The scale and complexity of our manufacturing base in China makes it particularly difficult to accurately assess compliance beyond the first-tier. We have continued to work with Segura, an independent supply chain platform, which has helped us to better map and understand our Chinese supply base and our focus has now broadened to the rest of our suppliers around the world. The mapping of our supply base has improved transparency which is pivotal in maintaining a robust supply chain. Having a better understanding of our supply base beyond the first-tier will increase the effectiveness of the due diligence conducted through enforcement of our Code, auditing and factory visits.

In light of the challenges in Turkey, we have been working with workers’ rights specialists with local expertise. They have conducted a training and monitoring programme with our subcontractors to ensure that they understand and uphold our Code of Conduct.

In 2016, Ted Baker became members of the Better Cotton Initiative (“BCI”). By increasing the ratio of cotton sourced through BCI we have greater transparency within our cotton supply chain. We have set a public target and are pleased to confirm we are on track to achieve it. We continue to train team members on how to source BCI cotton.

Our human resources department, known as Coach Station, continues to be an area of particular focus. To meet the needs of the business, employees are sourced through our internal recruitment processes as well as recruitment agents. In order to retain insight into the employment practices of recruitment agents, Coach Station requires every agent to complete a due diligence assessment that will flag any factors that have significant risk attached.

We work closely with our distribution centre and our partners at XPO Logistics in Derby, a potentially high risk area, to ensure standards set out in our policies are upheld in practice.

4. Performance Assessment

We can confirm that no reports or findings of slavery or victims of human trafficking within our supply chain have been received to date.

Our key performance indicators for the previous financial year were to:

  • Continue to deliver a tailored training programme to assist specific departments within the business in identifying indications of modern slavery;

    We have continued to train all departments who have direct contact with our suppliers to understand the warning signs of Modern Slavery and also understand how our practices can directly impact suppliers and their workforces. To date we have trained more than 150 team members, this training is an induction requirement for relevant departments.
  • Continue to make significant progress in mapping our second-tier supply chain in China and broaden the scope of our project to include additional suppliers around the rest of the globe;

    This year we have continued to work with Segura, to enhance our existing supply chain management systems. We are particularly working with Segura to ensure that we have clarity on our supply chains beyond first-tier. As mentioned above we have made significant progress in mapping our Chinese supply base to the second-tier (our suppliers’ direct suppliers). We are extending this project to include our global supply chain, the first-tier of which has already been mapped. ?We are making good progress and are set to have mapped to the second-tier in FY19/20.

  • Reduce the business’ reliance on conventional cotton by steadily increasing the quantity of BCI cotton in our collections;

    In 2017 we set a public Sustainable Cotton target of 50% by 2020, more sustainable cotton includes Better Cotton through BCI, Organic Cotton and Recycled Cotton.

    In our 2018 collections, we hit 30% more sustainable cotton up from 12% the year before. We expect this to grow significantly for our 2019 collections to achieve our 2020 target.
  • Training our Suppliers on the prevention of Modern Slavery

    In addition to the training in Turkey as mentioned above, Ted’s Conscience has met with suppliers to distribute our Code and supporting materials and discuss the threats and warning signs of unfair recruitment practices to mitigate the threat of modern slavery.

    In FY19/20 we will expand the work we are already doing in Turkey. We will continue to work with workers’ rights specialists to implement a structured mentoring programme with one of our Turkish suppliers. With the aim to ensure their factories and subcontractors not only understand our Code but have the skills and tools to implement it.

5. Year Ahead

We are continuously working towards deepening our insight into the working practices of our supply chain and own operations to strengthen our approach towards addressing modern slavery human trafficking. ?We have delivered each of the KPI’s set in FY 2018/19 and will continue to build upon these in the year ahead.

6. Training and Awareness

Internal training programmes have already been implemented to raise awareness of the risk of modern slavery within our business. Our board of directors have received training that highlighted the risk of slavery and its prevalence around the world, including the United Kingdom.

In the past year, we have focussed on training internal stakeholders who have direct contact with our suppliers. Our buying, design and production teams have all taken part in training to raise awareness of the risk of Modern Slavery and the steps that teams can take to reduce the risk of Modern Slavery occurring in our supply chains. As mentioned above this is mandatory training as part of the induction for these teams.

Our focus with external stakeholders has been to raise awareness of the requirements of the Acts. This includes the continued distribution of our enhanced Code and supporting materials to our suppliers and licensees detailing the threats and warning signs of unfair recruitment practices.

A very important part of eliminating Modern Slavery is ensuring suppliers fully understand what constitutes Modern Slavery and their responsibility to eliminate it. The training with suppliers mentioned above is an important part in achieving this.

7. Board’s Approval

This statement was approved by the Board of Directors.

Lindsay Page
Acting Chief Executive Officer, Ted Baker Plc.
4th April 2019