Spring Break
The SweatX Story:
Christopher Mackin Speaks at HBS
Carole Winkler (RA), Associate Editor, News and Campus Affairs
Issue date: 3/22/04 Section: News
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Meanwhile, Ben & Jerry's director Pierre Ferrari, an HBS alumnus, had long been fascinated by the power of branding. A New York Times article about a sweatshop in China caught his eye. Inspired, Ferrari created the SweatX brand of sports clothing to represent a viable alternative to sweatshops - by making clothes for people to sweat in. In the mid and late-1990s there were over 10,000 sweatshops operating in the U.S.
Ferrari chose to locate the venture, called TeamX, in the very garment district of LA that is home to some notorious former sweatshops.
TeamX was incorporated in 2001, and from the start it did things differently, says Chris Mackin, former CEO and director of TeamX, who spoke to HBS students on March 11. His goal is for TeamX to "be a magnet that lifts wages in the industry." Although the garment business has traditionally been unfriendly to labor unions, TeamX invited the major garment union, Unite!, to visit the shop. The operating entities are actually co-operatives owned by the employees. Whereas the ratio of CEO's compensation to that of the lowest paid worker in many public corporations today is 400 to 1, at TeamX it is 9 to 1. The workers have health insurance and they are paid for overtime.
"It is cooperative ownership-democracy at work," said Mackin.
Mackin ticked off the top markets for the SweatX brand - the music and entertainment industry (Jackson Brown allows only SweatX merchandise to be sold at his concerts), corporate logo attire (Red Bull is one well-known customer), and colleges, where social-minded students crusade to bring SweatX clothing into campus stores. Other wholesale markets include non-profit and activist organizations, faith-based progressive communities, secondary schools, and private label manufacturing, where TeamX has done a lot of work for Patagonia.
But what about the numbers? How can they possibly add up? Surprisingly, Mackin says, sewing the shirt is a miniscule percent of the retail price, which is about $12.00 for a plain T-shirt. SweatX sewing costs (not including materials or cutting) are about 45 cents; in Latin America the sewing cost is 3 cents, and in Asia it is one cent per T-shirt. Mackin figures consumers will pay an extra $.50 - $1.00 for a shirt knowing that the employee was compensated well ($12 per hour) and treated respectfully.
