Transparency and Accountability: How We’re Surviving and Forging Ahead Through 2020

There’s been a lot of talk lately within the sustainable fashion community about how transparency is not enough, and for good reason. Large corporations that made promises of sustainability gains in 2019 failed to follow through with the most basic ethical component to pay their workers fairly, on time and honestly, pay their workers period. The Covid-19 pandemic has revealed in great clarity the fundamental failings of the fashion system at taking care of its people on the most basic level. 

tonlé is both a brand and a manufacturer, and that is something thing which we as a team are quite proud of. We take full accountability for all of our team members' salaries and well-being while they are in our workplace—and honestly for an ethical or sustainable brand, that should be the bare minimum. At tonlé we are striving to go beyond that, to facilitate conversations about equity and justice across the fashion industry, about redistribution, about power about who holds it and why. We are challenging ourselves to do better, even during a pandemic, even during the most challenging of times we have ever seen for our business and for the industry. 

We don’t always share our successes, and we don’t always share our failures, but we did want to take a little time today to provide a little transparency and accountability for how this year has gone so far and where we are continuing to go moving forward. Below, you'll read about some of the wins, some of the losses, and some of the opportunities for growth and learning for ourselves and others.

 

The Bare Minimum: How We Paid our Team.

In the early days of the pandemic we started to see its effects rippling through supply chains as orders were cancelled and access to materials started to be cut off—most of which were produced in China. But nothing could prepare me for the week in March when—within 1 week—we had almost 90% of our season’s revenue cancelled. Most of our spring orders were to be shipped March 15th through 30th. The same week that most of our retail partners across North America had to close their doors. Most of these orders had already been produced and paid for because we pay our team members when they make products on a salaried basis, not necessarily when we deliver the products. In fact we had started production, and paying for, these orders more than two months prior. So without the incoming revenue I had no idea how we were going to pay our team the following months. Our e-commerce and retail sales at that time only made up about 10% of our revenue—with wholesale making up the majority.

In addition to that, because we are also a manufacturer we had to balance keeping our staff safe during Covid, and continuing to manufacture while keeping our business alive—no small feat when coupled with devastating sales losses, and the fact that we don’t have venture capitalists in our back pocket to turn to. Ultimately, we were lucky—because Cambodia wasn’t hit very hard with Covid—we had to limit our operations for a period of time and had some people working from home to space people out, but by and large we have still been able to operate and keep our team safe.

Back in March, I honestly had no idea how we’d make April’s payroll. But through conversations with the team and advisors—we pulled together, got a little scrappy, (and yes the pun is always intended with that one!) received some support—and decided to keep going.

 

In March and April almost 100% of our funds went towards paying salaries. We used fabric we had on hand, we deferred rent and loan repayments, we cut our marketing budget, and sadly, had to lay-off our two US employees in order to consolidate funds and make sure our team in Cambodia got paid. I continued to work without taking a salary and took on the full time role of shipping packages and customer support as well as my regular roles. We completely cut our already very slim marketing budget. We had a few additional income streams including:

1. Donations to pay our team—we raised approximately $8000 in donations that went directly to covering salaries. Keep in mind that because of the way payments work in the fashion industry, we had already paid the salaries for the products that our team had produced that we now couldn’t sell. This is why so many factories were left in such a tough bind: because they don’t get paid until they ship goods—or sometimes months after—while they need to pay their workers upfront. So if a customer, AKA a large brand, decides not to pay for an order a factory already started paying to produce months prior, it puts the factories in a very difficult spot. We are grateful to the friends and family who supported with donations as it really contributed to being able to still pay our team in a moment of crisis when it was desperately needed. This was primarily forwarded into producing masks for the community and into non-salary stipends to make sure that people had extra support during this challenging time. Special shoutout is deserved here to Benita Robledo who used her platform to help promote and support this fundraiser!

2. We had large orders for masks that helped cover our production costs for April and May—these orders only covered the costs of running our Cambodian operations—team salaries primarily—but we did not make any additional margin off these products. 

3. Our online sales started to pick up (thank you to our customers!) and that helped to cover some of the losses. Previously, online sales had been about 10% of our business, and now, they are about 50%.

4. Some of our incredible mainstay wholesale buyers kept their orders and continued to order from us—and others came back around and were able to take their orders later after the initial shock of the first wave of lockdowns. I realize this was not possible for everyone because most of our buyers are independent retailers and family-owned businesses who also were closed and didn’t have a financial cushion (I also blame this on the US government for not doing enough to support small businesses but…let's not go there…) And sadly some of our customers have had to close their doors permanently. But to the ones who were able to—it meant so much to us and helped keep us alive so I want to shout them out specifically. To those that went above and beyond—I wanted to shout you out specifically and I encourage our customers to also go and support these fantastic small businesses in your communities: Resurrect Boutique, Pachamama market, Spoils of Wear, Local Nomad, Terra Shepherd Boutique, and The Cura Co.  

5. Sample box sales—to those of you who ordered a sample box, it allowed us to clear some inventory and get items to you at a great price, as well as have some extra cashflow to front some of the costs we were unable to pay. It went a long way—thank you!

6. Government Support—we did finally receive a PPP loan in June and an EIDL in July—4 months after we applied so way too late—and we could only use it on US expenses so it didn’t help with paying our team in Cambodia. The majority of this is still a loan; we do have to pay it back. However, I was able to hire people to help me starting in June—because at that point I had worked for 3 months straight, alone, unpaid, without a single day off. Saying I was burnt out is an understatement. For those of you who’s orders were late or mis-shipped at this time—I want to extend you a debt of gratitude for your kindness and patience at that time, it was rough! I was also able to start paying myself with the funds from this loan at SF’s minimum wage.

7. Grant funding—we received a small grant which was earmarked to hire consultants to help with our website and branding revamp. This helped us to become more values aligned in our communications. I am grateful to everyone who supported this project! Feel free to check out these blog posts to learn about how we’re evolving and why.

 

Between all of the above—we’ve been able to stay afloat AND pay our entire team in Cambodia, on time and in full. That is something I am very proud of because it was not easily done during this difficult time, and I know many businesses have struggled to stay afloat.  But we have very little cash left on hand—in other words, we have not made a profit and will probably still come up at a loss at the end of the year because of loans we had to take on. We also used some of the money we received in donations to give bonuses and stipends to our team when there was a potential of Phnom Penh going on lockdown, to make sure they were prepared and taken care of. I’m highlighting this because it is not something we deserve kudos for doing—a business should take care of the people who make the physical products they sell, first and foremost. We could have, for example, shut down the production and simply outsourced our products when our brand had more funds. That is what most brands do—and it wouldn’t have been “hard” to do.

But to me and other members of the tonlé team—there would be no point in running this business without the production team. Our people are literally the backbone of what we do, and tonlé without its production team would simply cease to exist.

The opposite is true in the larger fashion industry—workers are considered disposable, which still absolutely blows my mind. How are the people who produce your products not considered a core part of what you do? There’s a long history that has led to the outsourcing model where production is separated from design which I don’t have time to get into here—but needless to say—there is a fundamental lack of equity. The pandemic didn’t lead to the garment industry’s collapse and millions of workers not getting their fair payments, it was hundreds of years of exploitation and extraction from colonized nations that lead to this deeply inequitable dynamic between (mostly white male European/American owned) brands and factories (mostly in colonized nations with BIPOC owners and workers). The pandemic only exacerbated this fundamental unfairness.

While I don’t think we deserve praise for doing this most basic of things: paying our workers at the time when they need it most; I do know that if tonlé can do it, then certainly large corporations who have made shareholders incredibly wealthy through extractive, exploitative production processes should be able to do so.

We have joined Remake in calling on large brands who have not paid their workers to do so. Yes, it’s complicated, but in many ways it’s not at all. I pointed out in a previous article that there are 40 million people in modern day slavery—many of them working on products that end up on Amazon. Jeff Bezos alone has enough money to pay all those people a living wage for the next year and still have billions left over. I calculated this on March 27^th and from March to June this year, Bezos’s wealth has increased by more than $50 billion—an increase of 40% from when I made my first calculation. Amazon stocks products from brands who have been refusing to pay their workers. in fact, there’s a high likelihood that some of the products on Amazon, the workers were actually not compensated for producing those products.

All this to say: we have championed alongside Remake and a number of other activists to petition brands to #Payup. tonlé is small but if we can do it, these brands can certainly do it. You can read more about the campaign and the work that they are doing here.

 

Other campaign updates: Solar panels

To shift gears, we wanted to talk about a couple other fundraising projects we did over the last calendar year and what the outcomes were. The first is regarding the solar panels which we raised $15,500 to fund. We had hoped that with this money, we’d be able to solarize our workshop. We were able to raise the funds primarily through loans from friends and family—which had to be paid back, ($14,800) and partially through the sale of gift cards ($700.) We did pay for and install the solar panels. However, shortly after installation, it became clear that the solar panels were not working. We had originally told our audience that our workshop was solar-powered at this time, because at first we thought that we were getting our power from solar. It was only until later, when we got our electric bill, that we realized that we were only getting a minuscule amount of power from the solar panels. The solar company (Kamworks) originally blamed this on the rainy season, but in fact it was that they had dramatically miscalculated the positioning of the panels, the amount of energy that would be needed, and had made other technical errors. Instead of admitting this, they gaslighted and blamed members of our team into trying to believe it was our fault with misogynistic and racist rhetoric. We did not want to mention this on social media, because we wanted to give them a chance to rectify their mistakes. We gave them several months before we started asking for refunds. By this time we were already making loan repayments—even though we were still paying our full power bill. We never got more than 10% of our energy from solar. In short, this company defrauded us. They eventually agreed to give us a refund, but then never did. I wanted to give them a bit of time at the beginning of the pandemic since everyone was facing financial duress, but they never responded. It has been over a year and we paid the loans back fully—despite never getting anything back from Kamworks. The co-founders of this company are Dutch—this is a prime example of white men abusing their power in other countries. The fact that they think they can—and did—get away with this in Cambodia is very upsetting. I wanted to post about this because I feel bad that we had advertised to our friends and supporters that we were solar powered—when in fact that was not the case—despite investing to become solar powered. I believe this company needs to be held to account—but I don’t know how or if they will be held accountable. 

 

Tree planting fundraising campaign: Plant 1000 trees  

We ran a campaign in September last year that was to support a tree planting initiative run by a local organization in Cambodia. Cambodia’s rainforest are being deforested at an alarmingly rapid rate, and we wanted to support a local initiative to work on this issue. Our team was also planning to volunteer to help plant the trees during our team retreat. Our fundraiser unfortunately did not hit it’s target: we were actually only able to raise enough to plant 250 trees, but we decided to set the money aside anyway to follow through on our campaign. Then, our partnership in Cambodia fell through because of issues related to flooding in the area where the partnership had been planned. The planting was then postponed twice—and then finally didn’t happen as a result of the Covid-19 Pandemic. Because we had promised to fund the planting of 1000 trees—we are still very much committed to do so and are currently seeking another partner to work with on the tree planting. If you are based in Cambodia and have organizations to recommend please reach out and let us know! We wanted to be open about where that initiative was at with the people who supported this campaign.

 

Circularity

In early 2020 we were approached by the Circular Fashion Pledge asking us to sign the pledge to take a step towards making our business more circular. This was something we had wanted to do regardless, and we were excited that their goals aligned with our own as well. We were asked to commit to one major step towards making our brand more circular. The one we chose was: "by the end of 2020, launch at least one method or partnership to enable your customers to send-back or resell their used items." Our answer to this is open closet, which we are proud to say has launched last month, with several customers participating in both trading in and re-purchasing tonlé pieces. We are excited to have taken this step and we look forward to sharing more details of what we have accomplished with it in early 2021!

 

What’s next for the tonlé team?  

We have some exciting campaigns initiatives still to announce in these last few months of 2020! Overall, while this year has been hard financially, we are staying afloat in that regard (though not in the safe zone) and we’ve gotten to take some time to re-align priorities and goals from a social and environmental perspective. That has been a challenging yet refreshing process and we are internally proud of this work. We’ve gotten to focus more on our direct to customer base (through e-commerce) and more deeply engage with our core boutique clientele through wholesale. We feel that we’ve grown stronger as a team, identified what is core to our business and who we are, and gotten to learn together with you, our customers. All of this has been positive though not without hardship. We’re hopeful about the future of tonlé, and the potential for positive change within the larger industry—but the need for radical change within the industry could not be clearer. In short, we remain cautiously optimistic, and committed to the constant learning and improvement that is needed to make change within this space, and we’re so glad you’re here for it!