Hugh Braithwaite talks to Wall Street Journal about garment retailer’s crisis response

Crisis Communications, Public Relations, Strategy

Hugh Braithwaite talks to Wall Street Journal about garment retailer’s crisis response

Crisis Communications, Public Relations, Strategy

Our founder and CEO, Hugh Braithwaite, is a regular contributor to The Wall Street Journal’s “Crisis of the Week” feature, where outside communications experts weigh in on the latest brand crises. Below is an excerpt of a recent feature, including Hugh’s comments. Read the full piece here.

Private equity firm Apax Partners and a company it owns, Germany-based retailer Takko Holding GmbH, are in the crisis crosshairs after a report said Takko was using a garment factory in Myanmar that employed underage workers, according to the allegations made in the report by the Dutch non-profit Center for Research on Multinational Companies.

Takko said the company became aware of the problems in August 2016, after an audit report from non-profit garment industry worker advocacy organization Fair Wear Foundation. The company said it sent a team of managers and auditors to the factory after the report, adding progress was made “to improve working conditions on site in accordance with our code of conduct,” which Takko said is binding to its business partners. Apax issued its own statement saying “compliance with our values is a key priority,” adding it is working with Takko’s management to see if “additional protocols can be put in place” to prevent future issues.

The experts break down how well Apax and Takko handled the problem.

Hugh Braithwaite, chief executive, Braithwaite Communications: “The two golden rules of crisis response are validate the concern and show you care. Takko’s comments fail on both counts. On a scale of one to 10, its response limps in at a solid four. Employing underage workers is an easily understood and very human issue with little gray area. Saying it was “able to make considerable progress” is not enough and demonstrates a serious lack of concern for the issue.

“Its second comment about taking it seriously and how the findings violate its code of conduct and company values rings hollow following such a lackluster first comment about ‘progress.’ [While] Takko [says] ‘there are no youth workers in the factory any more,’ repeating the negative issue ‘youth workers in the factory’ only reinforces the core of the issue, creating a defensive stance for the company. In crisis, when you’re defending, you’re losing.

“Comments from Apax, the holding company, do little to boost the overall response effectiveness. Rather than validating the concern for the issue of underage labor, or showing any additional action or concern, it only reiterates Takko’s values comments–and worse, commends the response of its portfolio company, Takko.”

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