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Green Business: People Tree

Peter Salisbury

6th April, 2011

People Tree’s Safia Minney has come through crises, both financial and natural, buoyed up by the belief that Fairtrade should top the fashion agenda

When a massive earthquake hit Japan on 11th March this year, Safia Minney was in the Tokyo showroom of People Tree, the Fairtrade fashion company she set up in Tokyo 20 years ago. Unsure whether she would be safer outside or on the third floor with employees cowering under their desks, she ran out on to the street with Masako Ueda, the head of the People Tree’s design team. ‘If the buildings came down we would probably get crushed, but Tokyo is a place of buildings and few open spaces,’ she wrote a few days later. ‘It went on and on, all afternoon, all evening, and the next day there were constant tremors.’

Less than two weeks after the earthquake, Minney is on hand to greet the Ecologist at People Tree UK’s East London headquarters. Surrounded by racks of clothes and fabric samples in the brightly lit two-storey office, she is calm and composed in the murmur of day-to-day business. Petite, dark and immaculately dressed, she looks younger than anyone who has been running a business as challenging as hers for 20 years has the right to. Conversation flits from recent weak margins in the industry to the ugliness of early Fairtrade products. Minney politely moves away from any questions on her personal feelings about Japan; her home, part time at least, for the past two decades. Although the earthquake has been the most personally affecting of all, it wasn’t the first crisis, natural or financial, she or People Tree have had to deal with.

In the 1980s, Minney worked at the London-based design and advertising industry magazine Creative Review before setting up her own PR consultancy working with NGOs like Friends of the Earth and socially conscious magazines such as the New Statesman. Her experiences made her re-evaluate her goals. ‘Being part of the advertising industry you are surrounded by a lot of brilliant people with great ideas who largely are a little disillusioned with the objectives of what they are doing,’ she explains. ‘They love being creative and they love what they are doing in terms of visuals or copywriting but they would love for it to be useful in terms of it creating social change, whether it be for environmental awareness or social justice.’

In 1990, she moved to Japan with her then-boyfriend (now husband), James, an investment banker. Taking language classes with ‘bonkers’ Italian and Indian missionaries who were working with the Japanese poor, she became increasingly aware of social issues in the country, which was at the end of a period of red-hot economic growth. ‘It was the end of the bubble, but despite the affluent society that we all thought Japan was, it had its disenfranchised people,’ she remembers. After a stretch working at The Body Shop’s first Japanese store she realised there was a market for eco-friendly goods, but that there was little around in the way of information on green issues, awareness of which was growing in Europe. In 1991 she helped found the NGO Global Village; a loose network of volunteers who publish information on green issues. As time went by, Global Village started to import accredited Fairtrade clothing under the aegis of a new company, Fair Trade KK, founded in 1993. It was, Minney says, ‘close to a disaster.’

Most of the products were tailored for British consumers, whose expectations of Fairtrade goods didn’t go quite as far as those of Japan’s famously fastidious shoppers. ‘We realised quite quickly that we had to work directly with producers,’ she explains. In 1994, in collaboration with producers from India, Bangladesh and Zimbabwe, Global Village produced the first garments in the world to be certified both organic and Fairtrade, which took the form of ‘not-terribly-attractively shaped’ T-shirts and hoodies made for the Japanese market. Minney’s first experience of a major earthquake came the following year - just as People Tree was being set up as an independent brand - when more than 6,000 people lost their lives in the southern Japanese city of Kobe. Japan, its growth already cooling, entered a period of economic stagnation from which it is yet to escape.

As the devastating East Asian financial crisis broke in 1997, the company expanded its remit to bona fide fashion goods. In June 2000, the early arrival of the monsoon season in Bangladesh, a key production site for People Tree, left the country 70 per cent under water. ‘We asked our customers in Japan to order their products but to be happy to wait until they came. We also asked for relief aid, and so little boats were travelling around to the tops of roofs to deliver blankets and food and we had to wait for three months for the looms to dry out. Even though the water had subsided we couldn’t start production nor was it a priority over getting houses and families up and running.’ A year after the Bangladesh floods, People Tree launched its UK operation. The response from the British press was less than friendly.

‘[Fairtrade] had been around in terms of kaftan kind of things, really quite vile stuff; fine if you were at a music festival, but not something you could wear to the office or to Davos or on the red carpet,’ says Minney. ‘It wasn't fashion; it was clothing, at frankly, its worst. So when journalists mocked us when we started in the UK, they were absolutely right to, in terms of our attempt to move away from that kind of hempy, hippy dippy type of product to something that was really fashion.’ Furthermore, in a world where quick production turnarounds, constant innovation and thin margins are key elements of the business model, handmade clothes from rural Africa or India, which typically cost 30 per cent more to make than high street clothing, are a tough sell.

‘Technical support, product development, all the environmental standards to meet, the higher production standard targets in terms both of environmental and social issues,’ Minney says. ‘It’s probably the hardest sector to crack in terms of Fairtrade.’ It’s a miracle to be able produce something in rural India or Bangladesh that would satisfy shoppers on the high street in the UK or Japan and which turns a profit for everyone involved. It was 2001 before People Tree Japan actually made any money, and the UK branch, now into its tenth year, is yet to make a penny.

As the global recession bit into consumer spending in 2009, the UK arm of People Tree made a record loss of £375,000. Minney expects to report a similar deficit for 2010 when accounts are completed later this year, although she is bullish on 2011, when she says that the company will turn a small profit for the first time. People Tree was largely sustained in 2009 by loans from Root Capital Incorporated, a US non-profit sustainable investment fund, and Dutch micro financier Oikocredit, while sustainable trade investor Shared Interest opened a £634,000 trade credit facility. Earlier in the year, Oikocredit had converted a £500,000 loan into shares in People Tree. But the company can only convert so many shares and open so many new lines of credit. It was due to see strong revenue growth in 2011, but in the aftermath of the earthquake that the company has slashed its Japanese sales forecast for by 30 per cent, Minney says.

On the bright side, recent years have seen the company’s profile grow, thanks in particular to interest from Leeyong Soo, international fashion coordinator for Japanese Vogue. On his recommendation, People Tree formed partnerships with top designers such as Richard Nicoll, Bora Aksu, Thakoon, and Japanese label, Foundation Addict. The company has subsequently sold clothes through Topshop, ASOS, Selfridges and, most recently, John Lewis. In 2011, the actress Emma Watson helped design a youthful range of clothes, and People Tree’s Autumn/Winter collection was designed by Irish fashion doyenne, Orla Kiely.

Designers like to work with ethical brands, in part because it assuages their consciences  - labour practices in the industry remain suspect to say the least, and People Tree pays up to three times the going rate for textiles workers in India and Bangladesh - but the company’s commitment to high production standards gives them an extra draw for up-and-coming fashion talent. ‘We have had some designers join us recently both in Japan and the UK and one of them was absolutely shocked at what we could produce, in relatively small volumes, because we are well known in terms of organic, and factories and spinning mills will work with us because you know that we are the tip of the spear in terms of what is happening in terms of organics and trends so they are happy to do very exciting and innovative things with us,’ Minney explains.

Meanwhile, Minney’s message, in the wake of the Japanese earthquake, tsunami and nuclear alert is simple: something has to change in the way we approach our day-to-day lives, from the clothes we wear to the food we eat. ‘We very much hope that this is a wake-up call to what is important,’ she says. ‘How our lifestyles and everything we do is linked to natural resources, and that what we do will in some way be seen as part of the solution for that.’

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