Australian fashion label Camilla has revealed why it exited contracts with three tier 1 suppliers in FY23, citing compliance failures and limited business opportunities. For overseas jewelry buyers, this case underscores the growing importance of social audit compliance and direct supplier relationships in global supply chains, particularly when sourcing from China and India.
Compliance-Driven Supplier Exits
Camilla’s modern slavery statement, covering FY23, confirmed that the primary reason for exiting one supplier in Brazil was a lack of third-party social audit compliance. “This was after many attempts to encourage a globally available compliance program, to no avail,” the brand stated. Another supplier in India was dropped due to small business volume and limited mutual opportunity. A fragrance agent in Australia was exited due to no ongoing opportunities.
Supply-Chain Impact
During FY23, Camilla worked with 24 tier 1 manufacturing facilities, including 15 direct factory suppliers, five agent partnerships, three license agreements, and one sale-or-return agreement. While most facilities originated in China, 73% of fashion production by volume came from India, and 25% from China. Direct relationships made up 65% of tier 1 suppliers, accounting for nearly 97% of intake at cost.
Direct Engagement and Transparency
Camilla emphasized that all communication and transactions are conducted directly with factory teams. “Direct engagement with the supplier through transparent communication develops trust, supporting both parties’ operations,” the brand noted. Partnerships include site visits and on-site third-party auditing with corrective action plans. This open dialogue helps reduce risks of modern slavery in complex supply chains.
What Buyers Should Watch
Camilla has mapped its entire tier 1 supply chain and is working on tier 2 visibility, covering 23 fabric, yarn, and tannery facilities, three major trim producers, six finishing suppliers (including packaging), and five digital print mills. A key partner in Gurugram, India, owns three main tier 1 manufacturing facilities and one printing factory, producing 71% of total garment and accessory value. This partner manages warehouse logistics in India, with annual Sedex social audits showing no major non-compliances.
China Sourcing Context
In FY23, Camilla onboarded three new accessory suppliers, including a luxury scarf producer in Italy and two manufacturers in China—one for small accessories and one for eyewear under a license agreement. The brand also sources limited bed linen from Pakistan (less than 1% of business) and towels from China, with cotton sourced from Switzerland. For jewelry buyers, this highlights the need for rigorous audit compliance and direct relationships when sourcing accessories from China.
Source: Read the original report | Published: May 29, 2024