Macy’s Goods Not Produced in Long Island City “Sweatshop”
July 31, 2008
Macy’s, Inc. (NYSE:M) today reported that a Long Island garment factory cited by the New York State Department of Labor for labor law violations was, in fact, not manufacturing goods for sale at Macy’s.
“There is no place in Macy’s stores for goods that are manufactured by workers who are underage, underpaid or forced to work in conditions that are illegal,” said Janet Grove, vice chair of Macy’s, Inc. and chairman of Macy’s Merchandising Group. “We have cooperated fully with the Department of Labor and applaud the department for its vigorous enforcement of labor laws.”
On July 23, the Department of Labor announced significant violations at the Jin Shun Incorporated factory in Long Island City, NY, which was reported to have been making women’s apparel for Macy’s and other leading U.S. retailers.
An internal investigation conducted by Macy’s, however, discovered that no Macy’s goods were found in Jin Shun. But a factory named Zheng Da Inc. in Long Island City, which also was inspected by the Department of Labor and also cited for labor law violations, was making apparently counterfeit goods with labels from a Macy’s private brand. These goods, which were neither ordered nor authorized by Macy’s, were private brand prints from previous seasons and of inferior quality to those made to Macy’s specifications. Macy’s, Inc. is considering legal action against the owners of the Zheng Da factory for unauthorized manufacturing of counterfeit goods under a label owned by Macy’s.
Moreover, independent third-party monitors retained by Macy’s twice inspected the Jin Shun factory in 2007 as Macy’s was evaluating potential suppliers for its private brand merchandise. In both instances, the Jin Shun facility was rejected and removed from consideration because of incomplete employment record-keeping. All Macy’s vendors are required to conform to the company’s stringent Vendor/Supplier Code of Conduct that sets out specific standards and requirements for any vendor doing business with Macy’s.
“This case reinforces the importance of our process for monitoring the suppliers and factories that make products sold at Macy’s. The Jin Shun factory did not meet our requirements and thus was prohibited from manufacturing for our stores,” Grove said. “Yet the experience with these Long Island City factories reminds us that we need to remain vigilant because some potential suppliers clearly are not up to the high standards we set.”
Macy’s, Inc., with corporate offices in Cincinnati and New York, is one of the nation’s premier retailers, with fiscal 2007 sales of $26.3 billion. The company operates more than 850 department stores in 45 states, the District of Columbia, Guam and Puerto Rico under the names of Macy’s and Bloomingdale’s. The company also operates macys.com, bloomingdales.com and Bloomingdale’s By Mail. Prior to June 1, 2007, Macy’s, Inc. was known as Federated Department Stores, Inc. and Macy’s Retail Holdings, Inc. was known as Federated Retail Holdings, Inc.
All statements in this press release that are not statements of historical fact are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements are based upon the current beliefs and expectations of Macy’s management and are subject to significant risks and uncertainties. Actual results could differ materially from those expressed in or implied by the forward-looking statements contained in this release because of a variety of factors, including conditions to, or changes in the timing of, proposed transactions, changes in the conditions of the securities markets, particularly the markets for debt securities and other factors identified in documents filed by Macy’s, Inc. with the Securities and Exchange Commission.
(NOTE: Additional information on Macy’s, Inc., including past news releases, is available at www.macysinc.com/pressroom)