REPORTING PERIOD AND DISCLOSURE
Both the California Transparency in Supply Chains Act and the UK Modern Slavery Act require companies doing business in California and in the UK, respectively, and exceeding specified volume thresholds, to disclose their efforts to ensure that slavery and human trafficking is not occurring in their businesses or supply chains. This statement relates to our fiscal year ended December 31, 2016 and includes the activities of Kate Spade & Company and its consolidated subsidiaries.
ABOUT KATE SPADE & COMPANY
Kate Spade & Company (NYSE: KATE) operates principally under two global, multichannel lifestyle brands: kate spade new york and Jack Spade New York. The Company’s four category pillars – women’s, men’s, children’s and home – span demographics, genders and geographies. The Company also owns Adelington Design Group, a private brand jewelry design and development group.
THE KATE SPADE & COMPANY SUPPLY CHAIN AND STANDARDS OF ENGAGEMENT
The Company contracts with third-party independent manufacturers for the supply of its products, which are fabricated to the Company’s specifications. Although the use of third-party manufacturers presents certain risks, every one of our direct suppliers must agree to Kate Spade & Company's Standards of Engagement which include an explicit prohibition against the use of forced labor, including prison labor, indentured labor, bonded labor or other forms of involuntary labor. Click here for the Company's Standards of Engagement.
The efforts that we have undertaken to verify the absence of forced labor and human trafficking in our supply chain include the following:
1. Verification - Factories that are added to our sourcing base must pass a human rights factory evaluation performed by our agent’s audit team; third party auditors or our internal audit team. Existing factories are then audited based on the amount of business with the Company and perceived risk based on previous audit findings and internal risk ratings for the country of manufacture, taking guidance from information provided by the U.S. State Department and U.S. Department of Labor on the topics of forced labor and human trafficking.
2. Supplier Audits - The Company distributes its Standards of Engagement to its vendors. Vendors are required to post these standards in the workers' native language at their factory sites. Factory audits are conducted using internal and independent monitors. In most cases, unannounced audits are also conducted to evaluate each of our vendor’s compliance with the Company’s forced labor standards. For more information on our auditing and monitoring protocols, please refer to the "Auditing and Monitoring" section on our website.
3. Certification - The Company's Vendor Agreements require vendors to comply with applicable laws within the country of manufacture including laws on slavery and human trafficking. To highlight the concern for forced labor and human trafficking, the Company has sent to its finished goods vendors educational information along with an affidavit for vendors to attest that they will 1) review the laws related to the topic for all jurisdictions where our product are manufactured 2) routinely assess the risks within their supply chain 3) remediate any instances that may be found and take steps to prevent a reoccurrence 4) be prepared to demonstrate to our auditors that they have taken these steps. In addition, our vendors must provide records to our company auditors upon request that are sufficiently detailed to demonstrate that production is in compliance with the anti-slavery and human trafficking laws of the country of manufacture. Such records may include a) all employee personnel files, including registration forms, photocopies of ID cards and training records b) all employee time cards and payroll records c) all employee employment contracts d) health & safety policies and procedures e) child labor policy and procedure f) grievance policy, procedures, records, etc.
4. Accountability to Our Standards - We are aware that vendors may not fully comply with our Standards of Engagement at all times. However management must be willing to commit to improving in areas where we have found non-compliance. If we see that improvements are being made, we generally continue to work with vendors. If vendors are not responsive, we will deactivate the factory code, thereby restricting future business.
5. Training – Training on the Company’s Standards of Engagement and policies has been provided to our agent, sourcing teams and vendors throughout the year with the objective of raising awareness on forced labor, and mitigating risk within the supply chain. In addition, training focusing specifically on the signs of forced labor and human trafficking has been provided to our vendors, internal sourcing managers and as well as our sourcing agent’s staff.
Kate Spade & Company continues to be committed to undertaking meaningful efforts towards the eradication of slavery and human trafficking in our supply chain.
Craig A. Leavitt
Chief Executive Officer