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Case Study On Everlane For Quiz #1

Everlane is an online clothing company founded in 2010 that aims to provide transparent and ethical fashion. It shares factory information and costs to be transparent with customers. While Everlane faced challenges with supply chain management and cultural issues internally, it received $85 million in funding in 2020.

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89 views3 pages

Case Study On Everlane For Quiz #1

Everlane is an online clothing company founded in 2010 that aims to provide transparent and ethical fashion. It shares factory information and costs to be transparent with customers. While Everlane faced challenges with supply chain management and cultural issues internally, it received $85 million in funding in 2020.

Uploaded by

alphchuk
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd
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BUS 1184 – Week 4 – Quiz #1

Case Study on Everlane

*** This is a modified version of a case from Carroll, A. (2021). Business & Society. Cengage.

Instructions:
Please read the case study below before answering the 20 multiple-choice questions for Quiz
#1. You will find Quiz 1 in the tab for Week 4 on our Moodle course site.
This is a graded assessment (worth 25%) to be completed independently. You may refer to the
course PPT slides, websites, and other resources. Expect to spend 60 to 120 minutes on this
Quiz. Quiz #1 will close at 11 p.m. today. Late or missed Quizzes will result in a 0 grade.
Everlane:
Everlane is an online clothing company founded in 2010. The company offers high-quality
clothes at lower prices sold online with the mission to provide “radical transparency.” This
includes informing customers about how Everlane works with “the best factories in the world”
(Everlane, About, 2021).
Its founder, Michael Preysman, wanted to develop an ethical and trendy clothing brand known
as ethical or sustainable fashion. Preysman began publicizing the costs of making Everlane
shirts on Facebook, which broke tradition from the unspoken protocol of keeping this
information as a trade secret (Berfield, 2015). He noted that in “traditional retail,” a designer
shirt is marked up eight times by the time it reaches the customer, and he promised to be fairer
to the consumer by passing on the cost savings of being an online-only store to the customer
(Berfield, 2015). For example, in response to the Rana Plaza collapse in Bangladesh in 2013,
when more than 1,1000 workers died in factories that supplied clothes to European and
American retailers, Everlane posted videos and photos of the workers and factories it uses for
production.
To do business with Everlane, factories must be willing to be photographed and publicize their
costs and audit scores. They must supply information about their workers’ dorms, including the
availability of hot water, heating, and air conditioning. All of this information reinforces
Everlane’s commitment to radical transparency, noted on its website as, “Know your factories.
Know your costs. Always ask why.” (Berfield, 2015).
Sustainable Fashion:
Companies like Everlane are part of a bigger fashion trend supporting ethical fashion and
sustainable practices. This trend is associated with a rise in conscious consumerism that has
driven many companies to change their global supply chains and increase their reputation as
good corporate citizens (Gonzalez, 2015). Some companies have chosen to be Fair Trade
certified through Fair Trade USA, which introduced more than 334 compliance criteria for
textile factories in 2012 and whose certification now appears on multiple brands, including

BUS 1184 Fall 2023 – Case Study on Everlane for Quiz #1 1


Patagonia. Other retailers have pursued “slow fashion,” which involves sourcing organic
materials and articles made by artisans and craftspeople and viewing apparel as a long-term
investment (Wise, 2019).
Supply Chain Challenges:
The supply chain has always been a focus of Everlane and its commitment to an ethical
production process instead of using organic, Fair Trade collections, or “artisan made”
classifications. Everlane takes a different approach, searching for factories certified by
independent outside organizations. Preysman spends time with each factory’s owner. During
one review of their Chinese suppliers, Everlane was deciding whether to break ties with the
factory after it twice failed an independent audit that tried to reconcile workers’ hours with
wages paid (Berfield, 2015). Everlane was trying to work with the supplier to raise its audit
scores rather than simply cut ties with the organization, in part because of a sense of loyalty to
the relationship but also because Everlane has struggled over the years to find ethical and
sustainable suppliers in China that were willing to take on a smaller company. Even as Everlane
grew to a company with more than $100 million in revenues by 2017, it faced supply chain
challenges compared to larger, global retail competitors.
Some worry that Everlane’s ambitions to be ethical and transparent cannot keep up with its
growth (Berfield, 2015). Preysman argues that the bigger his company is, the more impact he
can make (Berfield, 2015). However, in 2020, it seemed that Everlane was facing growing pains
and more. The financial fallout from the COVID-19 pandemic began to affect Everlane’s sales.
Beyond this, Everlane received poor ratings from the brand ratings platform Good on You (Testa
& Freidman, 2020). Everlane was criticized for not tracking greenhouse gases across its entire
line, not reducing water use, and not providing initiatives to guarantee living wages. Since then,
the company has decided to produce a CSR or Sustainability report and work through third-
party certifications. It also committed to ensuring all of its cotton comes from certified organic
sources and eliminating plastic from its supply chain (Testa & Friedman, 2020).

Internal Challenges:
Internally, things also unravelled for Everlane when, in 2020, employees accused Everlane of
promoting poor company culture due to racism and failing to implement formal processes to
deal with harassment or discrimination (Testa & Friedman, 2020). When a group of remote
workers announced they were unionizing, subsequent layoffs at the company seemed like
retribution for the union push, although Everlane denied such intentions (Testa & Friedman,
2020). Everlane responded by making organizational changes, opening up a seat on the board
for a person of colour, and rolling out anti-racism training for the entire company (Kent, 2020).
In late 2020, it was announced that Everlane had garnered $85 million in new funding from a
private equity firm (Kent, 2020). Many saw this as an endorsement of the company, its founder,
and its platform for radical transparency in sustainable fashion. Whether or not it will help
Everlane regain its reputation for ethical and sustainable fashion remains to be seen.

BUS 1184 Fall 2023 – Case Study on Everlane for Quiz #1 2


References:
Berfield, s. (2015, December 7-13). Making Ethical Chic. Bloomberg Businessweek.
Everlane (2021). About. https://www.everlane.com/about
Gonzalez, N. (2015, February 19). A Brief History of Sustainable Fashion. TriplePundit.
https://www.triplepundit.com/story/2015/brief-history-sustainable-fashion/58046

Kent, S. (2020, September 11). Amidst Tumult, Everlane Raises $85 Million. Business of Fashion.
https://www.businessoffashion.com/articles/retail/amidst-tumult-everlane-raises-85-
million/

Testa, J. & Friedman, V. (2021, July 13). Everlane’s Promise of ‘Radical Transparency’ Unravels.
The New York Times. https://www.nytimes.com/2020/07/26/fashion/everlane-
employees-ethical-clothing.html

Wise, L. (2019, September 10). Industry Leaders Discuss Whether Sustainable Fashion is
Possible. TriplePundit. https://www.triplepundit.com/story/2019/industry-leaders-
discuss-whether-sustainable-fashion-possible/84836

BUS 1184 Fall 2023 – Case Study on Everlane for Quiz #1 3

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