Buying practices

Stockmann does not own any factories or production facilities, apart from the central kitchen of the department store chain. Instead, the fashion products sold in Stockmann’s divisions are made by contractors. Most of these products, around 80 per cent, are bought via our purchasing offices in Asia. In 2014, Lindex garments were bought from 190 suppliers and made in around 400 factories. Stockmann’s own brand garments were bought from around 150 suppliers and made in around 200 factories, and around half of the garments were purchased directly and half through purchasing offices. Lindex and Stockmann use the same suppliers and factories to a large extent.

Stockmann Code of Conduct and additional requirements

All suppliers are expected to follow the Stockmann Code of Conduct. In addition, we require that our own brands’ supply chain complies with the Supplier Code of Conduct, which incorporates the Business Social Compliance Initiative (BSCI) Code of Conduct, complemented with Stockmann’s additional requirements related to e.g. animal rights, chemicals and environmental matters.

New instructions and alignments can be made according to the human rights risks identified. At the moment, our alignments include, for example, the prohibition of the sandblasting method for jeans, as it can be hazardous to workers’ health if it is carried out without proper protective equipment or training, a risk that is controlled by not placing orders with factories that have gear for sandblasting. In 2013, we joined the Accord on Fire and Building Safety in Bangladesh, due to the risk posed by substandard factory buildings in the country.

A revised version of the BSCI Code of Conduct was adopted at the beginning of 2014. The revised Code sets requirements for Freedom of Association and Collective Bargaining, fair remuneration, decent working hours, occupational health and safety, special protection for young workers, protection of the environment and ethical business behaviour, and prohibits discrimination, child labour, bonded labour and precarious employment. During 2014, the new version of the BSCI Code was communicated to our suppliers and producers and their commitment was checked.

Factories in countries classified as high-risk by the BSCI where Stockmann department stores’ and the fashion chains’ own brand products are manufactured are regularly audited by our own audits, conducted by our own local personnel, and by BSCI audits conducted by a third party. If deficiencies are identified, a corrective action plan is formulated and its implementation is monitored. Local working conditions are also influenced through various international conventions and initiatives.

Criteria for choosing suppliers

When choosing a supplier, we pay attention to a number of factors. The most important criteria are: the fit with the Stockmann Group’s needs, supplier know-how and ability to deliver, quality and price, CSR with the focus on working conditions and environmental issues, and the potential for long-term relationships. All factories need to fulfil the Stockmann Group’s starting requirements and commit to the BSCI Code of Conduct and continuous improvement. We aim for long relationships with suppliers.

Unauthorized subcontracting is a risk for compliance with our Code. Our producers are always required to inform us about the possible use of sub-contractors in advance. As a result of our risk analysis, we have banned the use of sub-contractors in Bangladesh altogether, this being a zero tolerance issue which will lead to no further orders being placed.

Working at purchasing offices

Our six local purchasing offices in China, Bangladesh, India, Turkey and Pakistan play a key role in developing working conditions and identifying risks. The approximately 160 persons employed altogether by the offices are tasked with supervising purchasing and production. They review the procedures of each factory that they use before any orders are placed, and after which systematic responsibility work continues.

Our local CSR specialists provide training and support to suppliers and factory owners, to help them make improvements in line with our Code of Conduct and environmental requirements, while also performing announced and unannounced audits. Our local production and quality controllers also visit the production units on a daily basis to ensure that conditions meet our requirements, and report on any suspected violations of the Code of Conduct. Read more.

In addition to audits and training, every aspect of suppliers’ operations is rated according to a ‘supplier scorecard’, which forms the basis for development. Suppliers are evaluated by the score card twice a year, with the Code of Conduct vs. performance being included as a parameter. Based on the evaluation, we grade our suppliers, and those with the best results get the most orders.

Our goal is to provide transparent communications on issues that interest our stakeholders, and therefore we disclose our fashion suppliers.

Other products

In addition to our own brand products, well-known brand products are purchased for sale at Stockmann department stores. The responsibility issues regarding international and domestic brand products are assessed during the purchasing negotiations. The Stockmann Delicatessen uses well-known and reliable EU suppliers and favours long-term relationships. Stockmann does not directly import grocery products from outside the EU to Finland.