Social Report 2011 “Inspired by my own needs and of those around me, I set out to build a brand that had substance and truth, not dependent of the superficial trends of the fashion industry.” www.filippa-k.com Member of FWF: March 2008 Social report – Filippa K – October 2011 Contents About Filippa K 3 Facts and figures 3 History in brief 3 Filippa K organisation 3 Chart: Filippa K organisation 3 Summary: Social goals and achievements 4 Sourcing strategy 5 Sourcing strategy & pricing 5 Chart: Production by country based on cost 5 Production in Europe 5 Organisation of the sourcing department 5 Production cycle 5 Selection of new factories 6 Restricted Chemicals list 6 Integration of monitoring activities and sourcing decisions 6 Coherent system for monitoring and remediation 7 China 7 Factory A 7 Factory B 7 Factory C 8 Previous audits in Turkey and Romania/Italy 8 Complaints procedure 8 Training and capacity building 9 Staff members – information activities 9 Figure: CR Framework 9 Trading companies – information activities 9 Manufacturers and workers – information activities 9 Transparency and communication 10 Forthcoming CR work – 2012 10 Social Report 2011 2 About Filippa K About Filippa K Filippa K is a leading Swedish high quality fashion brand with 45 own stores, 25 shops-in-shops and 600 selected retailers. Our larg- FACTS AND FIGURES: est market is Sweden and the head office is located in Stockholm. Headquarter: Stockholm, Sweden Besides Sweden, Filippa K is represented on six core markets (Nor- Brand established, founded: 1993 By Filippa Knutsson and way, Denmark, Finland, The Netherlands, Germany and Belgium) as Patrik Kihlborg well as on ten additional export markets. Annual turnover 2011: SEK 528 million Filippa K’s business idea is to design, manufacture, communi- Profit before tax 2011: SEK 77 million cate and sell fashion garments and accessories with its own, time- CEO: Jon Abrahamsson less style. By offering well-designed products with a clear concept Employees: 200 and of high quality at an attractive price, Filippa K shall be one of Markets: present on 7 core markets and on 10 export markets, the most attractive brands for both women and men who appreci- predominantly Scandinavia and Northern Europe ate fashion and quality. Retail: 45 Filippa K stores, 25 shops-in-shops and 600 selected Our vision is to make everyday life easier for the modern woman retailers and man, by interpreting fashion trends into wearable, timeless style Market positioning: Leading Swedish high quality fashion brand solutions that are long-lasting both in quality and design. Further information: www.filippa-k.com The Filippa K philosophy is based on the values Style, Simplicity and Quality. We apply these values to every detail in everything we do. Style in the way we are authentic, creative and passionate about HISTORY IN BRIEF: what we do. Simplicity in the way we communicate the Filippa K 1993 Filippa Knutsson and Patrik Kihlborg launch Filippa K, with the ambition to meet the need for simple, functional garments with brand in a straightforward, uncomplicated and honest manner. a clean design. Quality in the way we are demanding, responsible and respectful in 1994 Early positive response from Denmark and Norway leads to all our processes. By being true to our core values of Style, Qual- expansion outside Sweden. ity and Simplicity we aim to keep providing sustainable solutions in 1995 The stretch jeans become the first iconic product of Filippa K. the way we do business. As citizens in a global world, we want to Women all over Scandinavia start naming themselves “Filippa contribute to a more sustainable future for our customers, suppliers, K girls”. employees and business partners. To realise our vision, values and 1997 The first Filippa K store opens in Stockholm. strategy we have our greatest asset, our passionate and committed 1998 Based on positive demand, Filippa K Man is launched. Filippa K people. 2000 Filippa K starts to grow in Europe, entering Holland and Belgium. 2001 Filippa K opens first flagship store on PC Hoofstraat in Filippa K organisation Amsterdam. Filippa K’s head office is located in Stockholm, Sweden and 2006 The establishment of Filippa K continues in Europe. The employs around 65 people in design/range, supply, marketing, Swedish investment company Novax becomes majority share- retail, wholesale, HR, finance and Corporate Responsibility (CR). In holder in the company. September this year we appointed a CR manager who will coor- 2008 Filippa K defines environmental strategy and becomes mem- dinate and lead our social and environmental work. Filippa K also ber of Fair Wear Foundation (FWF). A second-hand shop with has separate country offices in Norway, Denmark, Holland and Ger- only Filippa K garments opens in Stockholm. many where the country managers develop the business within their 2010 The expansion continues with focus on core markets Sweden, Norway, Denmark, Finland, The Netherlands, Germany and respective markets. Belgium. There are 45 Filippa K stores and 25 shops-in-shops mostly 2011 Filippa K reaches highest turnover in the history of the located in Scandinavia and Northern Europe. We are represented company, Strong growth and profit development. by around 600 retailers who are mostly located in Europe but also in Canada, Australia, Hong-Kong and Russia. Filippa K organisation CEO Corporate responsibility Finance Range Supply Sales Marketing Local markets HR Design Production IT Pattern Logistics Social Report 2011 3 Summary: Social goals and achievements Summary: Social goals and achievements In 2011 we continued our focus on auditing our Chinese suppliers. on and fast-track our sustainable work agenda. The CR manager We carried out three audits in China – Filippa K initiated two of the will work internally and externally with sustainability issues. Our staff audits and one audit was conducted in cooperation with another is engaged in our sustainability work and we have formed a group Fair Wear Foundation (FWF) member who secures the services of with representatives from different parts of the company to focus the same factory. All in all we have now audited 89% of our suppli- on sustainability in their area of work. On our website we provide ers and are close to the 90% target we have set ourselves (that will information to end-consumers on our commitment to improving the be achieved in 2012). We visit our suppliers on a annual basis and social aspects of the production and our environmental work. We take the opportunity to talk about our work with FWF. are committed to staying true to our values and producing our gar- Exceeded overtime is a reoccurring problem at our Chinese sup- ments responsibly. pliers. To prevent this we work constantly with our suppliers to even In 2012 we will define our Corporate Responsibility (CR) agenda out production by switching production periods to low seasons for and develop tools to ease the implementation into our organisa- some styles. This has been a great success and we believe this is the tion. We will audit two more suppliers in China and carry out repeat most effective way to make a real change regarding working hours. audits of three-year-old audits. We will set up a structure for follow- This year we have made some organisational changes and ups of audits and follow-up all audits from 2011. appointed a Corporate Responsibility (CR) manager who will focus Social Report 2011 4 Sourcing strategy Sourcing strategy Sourcing strategy & pricing Organisation of the sourcing department Filippa K’s business idea is to design, manufacture, communicate The design and production departments work closely together and sell long lasting garments and accessories both when it comes during the collection process and product development, and have to style and quality. By offering a well-designed high quality product, shared targets for quality, sustainability, delivery performance and Filippa K shall be one of the most attractive brands for both women margins. Sourcing Managers are responsible for the sourcing of and men who appreciate fashion and outstanding quality. suppliers and materials. One of the main tasks for our production The collection consists of both men’s and women’s garments department is to maintain a close dialogue with our suppliers to and accessories. We offer high quality basic items – a wardrobe for ensure we achieve the best possible outcome for both parties. your everyday life, such as knitwear, suits, T-shirts, dresses, trou- Filippa K works both directly with suppliers and through trading sers, skirts and jeans as well as outerwear and more fashionable companies. The role of a trading company in sourcing rests often evening items. The accessories range consists of, among other on suggesting suppliers based on our requests. However, the final things, shoes, bags, ties and gloves. The collections are made with decision on whether to start collaborating with a supplier is always a long-term perspective and items from different collections can be taken by Filippa K and we do not commence a new partnership combined. A Filippa K piece is made to be loved for a long time. until we have visited the factory. Relationships established by a trad- The choice of suppliers is made by Sourcing Managers at the ing company are transparent and these usually result in a continu- start of the design process in order to distribute the production of ous business partnership in the forthcoming seasons. styles in the most effective way. We develop styles in very close cooperation with our suppliers to achieve the optimum level of qual- Production cycle ity at the right price. Our core values of style, quality and simplicity Filippa K manufactures one main collection and one in-season col- are reflected throughout our processes and we are never willing lection each season.