Transparency and Ethics at Everlane

Innovative US apparel retailer Everlane Inc. (Everlane) employed "radical transparency," disclosing detailed information about the costs it incurred and the factories that manufactured its clothes. The company also claimed to prioritize ethics and sustainability. For example, Everlane committed both to supporting its suppliers by addressing their needs and to eliminating virgin plastics from its entire supply chain by 2021. The company's approach had been successful: since its founding in 2010, Everlane had seen growth in its customer base and revenues. However, in 2020, the company faced a public relations crisis, encountering backlash after laying off a number of employees. While these layoffs were purportedly due to the economic effects of the COVID-19 pandemic, they coincided with employees’ unionization efforts. In addition, many former employees reported that the company was not, in fact, ethical but was anti-Black and anti-union and had a toxic internal culture. As the company had built its business on its image and its promise of ethics, transparency, and sustainability, the crisis called into question the foundation of the organization. How could Everlane move forward according to its stated values and continue to both meet the needs of its customers and to earn a profit?

This case is suitable for use in undergraduate- and graduate-level courses on ethics, sustainability, marketing, or innovation. It is a useful tool to discuss sustainability, ethics, corporate social responsibility, marketing, labour relations, and innovation within the apparel industry. Students must evaluate the company's history of success and its current predicament, explore its marketing mix and its practices related to sustainability and transparency, and evaluate its dilemmas. Students will assess the company’s strategic decisions, evaluate how these decisions led to customer value and affected the company's positioning, and recommend how Everlane should move forward. After working through the case and assignment questions, students will be able to do the following:<ul><li>Explain the concept of a company's product, including the core product and the product mix.</li><li>Assess the alignment of a sustainable retail apparel company's stated values with its strategic decisions.</li><li>Recommend how a company should move forward after a public relations crisis.</li><li>Recommend how a company should grow its business.</li></ul>

• ethics
• CSR
• sustainability