Knights Apparel's ethical business model: "The Alta Gracia Project: Changing Lives One Shirt At A Time”

Alta Gracia is a cause related, ethically responsible collegiate apparel brand whose mission is providing hope and a pathway out of poverty for people that manufacture collegiate apparel. Alta Gracia is changing lives one shirt at a time. Alta Gracia is the first and only apparel brand in the world where it is independently verified where the people making this clothing receive a living wage. Alta Gracia is a business model proving that Doing Good and Doing Good Business can go hand in hand.

About You

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About You

First Name

Joe

Tell us about yourself/your team.

It is estimated that the retail market for college logo products is approximately a $4 billion dollar industry. This industry includes some of the largest sports marketing companies in the world including, Nike and Adidas. Knights Apparel, Inc. started in 2000 and today is the largest supplier of college apparel in the United States.

What makes you an intrapreneur? What are the skills, capabilities, and personality traits that make you an intrapreneur?

Joe Bozich was a pre-med student at Vanderbilt University with a degree in mathematics. While at Vanderbilt, Joe became involved in competitive weightlifting and bodybuilding and in 1985 he became the US National Collegiate Bodybuilding Champion. This led to jobs with Gold’s Gym and Mattel Corporation. After finishing competing Joe combined his educational studies and physical abilities to create opportunities that led him into the business world. In 1987 Joe went to work for one of his sponsors Gold’s Gym, and launched their consumer products division selling apparel into all major retail changes throughout the United States. Eventually, Joe built upon that base, and started his own successful enterprise, Knights Apparel. Knights Apparel, has achieved #1 market share in its industry and today is the largest supplier of college apparel in the United States. Personal physical and emotional challenges activated a social consciousness that motivated Joe to take a business risk on an innovative model to devise competitive apparel production without sweatshop conditions. Included in those physical challenges was Joe’s diagnosis of an incurable disease, Multiple Sclerosis. This changed his life and what he wanted to do with his life and business. Personal commitment and an ability to infuse others throughout the organization with the same sense of purpose have helped achieve Alta Gracia’s success.
In 2005, Joe was named an Ernst and Young Entrepreneur of The Year and in 2010 the Huffington Post chose Joe as one of the Top 100 game changers of the year along with the likes of Warren Buffet and Bill and Melinda Gates. After 3 million votes Joe was named the Ultimate Game Changer in the style category.

About Your Organization

Company Country

United States, SC, Spartanburg, Spartanburg County

Primary country where this project is creating social impact

Dominican Republic, SC, Villa Altagracia

Additional countries or regions

Industry

Manufacturing

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Innovation

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Select the stage that best applies to your solution

Scaling (the next step will be growing impact on a regional or even global scale)

The Need: What social or environmental problem are you trying to solve?

People working in sweatshop conditions manufacturing apparel, and being stuck in a cycle of poverty. The apparel industry has been criticised for the “race to the bottom” trying to manufacture at the lowest possible costs. This race to the bottom has undermined labor rights compliance and has led to the existence of sweatshops where people receive poverty wages manufacturing apparel.

The Solution: What is your solution? Be specific!

Alta Gracia. Build the first apparel brand and factory anywhere in the world where the people making this apparel receive a “living wage” or a wage with dignity. Prove that “doing good” and good business can go hand in hand. Show that if given the choice consumers will make the choice to pick a brand that is ethically responsible and as a business you can be rewarded for being ethically responsible.

The Solution: Why is this solution innovative for your company and industry?

Because it has been talked about for over a decade, but until now it has never been made a reality.

The Model: Walk us through a specific example of how your solution makes a difference; include your primary activities.

By paying a Living Wage. We asked and answered the question: “How much money would each person need to be able to meet all of life’s necessities not just for themselves as an individual but for their family. That means wages and benefits to cover a family’s needs for Food and water, Housing and Energy, Clothing Healthcare, Childcare, Transportation and Education. This means we are paying about 350% higher wages then required by law in the DR. Universities are doing their own independent studies and are writing reports on results.

Please see links to the following reports on the impact of Alta Gracia on the people and the community. http://www12.georgetown.edu/sfs/docs/Research_Progress_Report_11-29b_wit...
and http://www12.georgetown.edu/sfs/docs/Alta_Gracia_Web_Final.pdf

From the new Report, “Alta Gracia: Work with a Salario Digno,” is co- authored by Dr. John Kline of Georgetown University's Walsh School of Foreign Service and Dr. Edward Soule from Georgetown’s McDonough School of Business, following is just one quote from an employee at AG taken from Georgetown’s above reports. “ A living wage “salario digno” means being able to work towards our aspirations. It allows one to accomplish dreams. Ina previous factory the road was always dark. You don’t get to see the results of working. A salario digno allows you to be identified as a human being.”

The Marketplace: Who are your peers and competitors? Identify others also working to address the needs you are and what differentiates you from them. What challenges could these players pose to your success or growth?

Our peers and competitors are the largest apparel brands in the world. Our peers also include student activist groups like united students against sweatshops USAS and United students for fair trade USFT as well as labor rights groups like the WRC, workers’ rights consortium. Here is what they said regarding what differentiates us:

“In the fifteen year history of codes of conduct and monitoring programs – despite hundreds of thousands of factory audits and a vast proliferation of ‘corporate social responsibility’ programs – the simple fact is that no major apparel brand has ever done what Knights Apparel is doing at the Alta Gracia factory." -Scott Nova, Executive Director of the Worker Rights Consortium (WRC)

Impact

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Founding Story: We want to hear about your "Aha!" moment. Share the story of where and when the founder(s) saw this solution's potential to change the world.

I just have a real desire; no I have a real NEED to KNOW that what I’m doing for work every day is making a real difference in the lives of people that our business touches.
Because I realize just how ordinary and at the same time how fortunate I am as a person.
There are people smarter than me; just as motivated as me with the same work ethic that will never have the opportunities I’ve had just because of where they were born and the circumstances in which they were born.
I went through a series of tragedies that changed my life and changed my views of what I wanted to do with my life and these events made the idea of just working to make money and gain market share seem much less important. In less than 1 year: a family member passed at 37, another died at 25, one of my children became so ill they almost gave up on life, another was diagnosed with term cancer 6 months to live and I lost vision and have been diagnosed with an incurable disease Multiple Sclerosis.
But these events also made me realize how fortunate I am because I will always have HOPE. I could afford the best medical care and did not have pressures of worrying about my job or paying bills when I needed to take time off work to help myself and family members.
It MADE me think, what about the people just like me but with NO HOPE. Treatment available but not for me cause can’t afford it and what about additional pressure of paying bills, rent, putting food on table.
Made me ask: How can you use your business and what you do every day to provide HOPE for someone who might not have it today? What if what you do every day, making apparel, could make a life changing difference, in the lives of people that your business touches? This makes me feel like my life and work have REAL purpose.

What has been the impact of your solution to date?

Workers are able to repay predatory loans bearing weekly rates of interest of 10% or higher. Parents can afford to give their children regular meals. Housing: workers are able to save a portion of their wages to build up a down payment and qualify for their first-ever bank loan. Workers are able to return to school to complete their education often abandoned when they were children. Psychological benefits: Many workers suffered long periods where their choice was unemployment or working in distant cities. Regular absences and constant financial worries combined to lessen family bonds and deny children parental guidance and nurturing. Alta Gracia has resulted in freedom for daily worry and fear about “What can I feed my kids? How can we pay the rent? What happens if we get sick? More simply then higher pay Alta Gracia means respect for labor rights and being treated with dignity as a human partner. Workers believe that their individual and collective self-worth is recognized and valued at Alta Gracia.

What is your projected impact over the next 1 to 3 years?

There is a wide spread between paying a living wage and the current practice of paying the legal minimum or prevailing industry wage. Reducing that spread requires a compelling “business case” –something Alta Gracia stands to provide in the apparel sector. Over time, the benefits of Alta Gracia’s humane and intelligent approach to management should be evident and they should be adaptable to a range of business models and pay scales. The long term promise of Alta Gracia is the light it shines on these possibilities. 2 years ago Alta Gracia was just an idea with business and no customers and today it is in over 800 US college bookstore retailers in the United States and it is performing as well as the most recognized brands in the industry. Over the next 3 years we expect that Alta Gracia will expand into other retail channels of distribution which will ultimately lead to more jobs and more Alta Gracia factories. We believe Alta Gracia will turn into a well know and desired apparel brand based upon appealing to the large and growing demand by consumers for ethically responsible brands.

What barriers might hinder the success of your project? How do you plan to overcome them?

Our biggest challenge is awareness and being able to help consumers understand how their purchasing power and Alta Gracia have the ability to change lives. Our plan is to continue grass roots educational opportunities by bringing students, universities and labor rights groups to Alta Gracia so they can see and hear first-hand how their support of Alta Gracia is truly changing people’s lives. We also need to continue to create awareness through traditional media as well as thru social media.

Sustainability

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What is the benefit or value you're creating for your business?

We are building a brand that is based upon being ethically responsible and as a result we are opening up new channels of distribution and new channels of revenue for our business. We are also distinguishing ourselves with our university partners as the leader in corporate social responsibility which impacts their decisions on renewing or granting license rights to their valuable brands. We are also creating value for our company by showing current and future employees that we are a company that cares more about just the bottom line which is a benefit in terms of recruiting and retaining talent.

How are you leveraging internal resources (funds, time, knowledge, etc.) to support this initiative?

Knights Apparel could never have made this initiative a reality without leveraging all of our company’s strengths and expertise in every area. This project has company wide support from every functional area, from sourcing and manufacturing to design and merchandising, sales CSR, and finance.

Expand on your answer, explaining the long-term funding and support plan.

We have support at a board level to finance and grow and support Alta Gracia. The first 2 years were obviously the biggest challenge for essentially what was a start-up as there was no proven market and no existing revenue. In our 3rd full year we are on track to being financially sustainable based upon now having built a retail network of over 800 college bookstores supporting Alta Gracia.

Tell us about your partnerships across your company and externally that are key to your project's success.

Not only do we have complete internal support, but we also have the external support from University Partners like Georgetown University, Harvard University and The University of Washington that have also engaged in studies on Alta Gracia; and also from Universities like Notre Dame that continue to use their university resources to help create awareness not only on their campus but throughout the collegiate industry. External partnership also exist with student groups like United Students for Fair Trade and Labor rights group such as the WRC, Workers’ Rights Consortium, as well as NGO’s such as the Maquiladora Health and Safety Network.

What internal support have you gotten for your project? What kind of push-back have you received?

We have no push back internally within our company. This is a company initiative that has widespread support because it is in line with our company vision and goal of being the leader in corporate social responsibility in the collegiate industry.

86 weeks ago ThienVinh Nguyen submitted this idea.