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Gap, Inc.

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Corporate Statistics
Gap, Inc. logo
Worker Rights Human Rights Political Influence Environmental Business Ethics

This company has areas of concern regarding Worker Rights and Political Influence

Gap, Inc.

San Francisco California USA

(650) 952-4400
http://www.gapinc.com

Type:

Public (NYSE:GPS)

The GAP has built its brand on basic, casual styles for men, women, and children (t-shirts, jeans, and khakis), but over the years has expanded through the urban chic chain Banana Republic and fast-growing budgeteer Old Navy. Gap runs about 3,000 stores worldwide. Other chains include GapBody, GapKids, and babyGap; each chain also has its own online incarnation. All Gap clothing is private-label merchandise made specifically for the company. From the design board to store displays, the company controls all aspects of its trademark casual look. The founding Fisher family owns about 25% of Gap Inc.

Contents

The GAP and GAPKids
The GAP and GAPKids

[edit] Corporate Facts

[edit] History

The Gap was founded in 1969 by Donald Fisher and Doris Fisher. The name came from the growing differences between children and adults, called "the generation gap", which reached its peak with the hippie movement. The Fishers had been frustrated with the lack of decent customer service and fashionable styles at other retailers. One of the original mottos of the company was "Levi's for Guys and Gals." The Gap began creating its own private label clothing in 1982 and had stopped carrying other labels altogether by 1990, when Gap stopped carrying Levi's jeans.


As of October 2006, Gap, Inc. had approximately 150,000 employees and operated over 3,000 stores (including franchise stores) worldwide. They have opened in the US, Canada, UK, France, Ireland, United Arab Emirates, Bahrain, Indonesia, Kuwait, Qatar, Korea, Oman, Turkey, Philippines, Riyadh, Saudi Arabia, Malaysia, Singapore, and Japan. [1]


Founder Donald Fisher was the original President, CEO, and Board of Directors Chairman. In 1983, Millard ("Mickey") Drexler joined the company as President and COO of the Gap division. Paul Pressler, who reviously ran the Disney theme parks, replaced Drexler as President and CEO in 2002. In 2004, Robert Fisher replaced his father as Board of Directors Chairman, and in 2007 Glenn Murphy joined the company as Board of Directors Chairman and CEO; Murphy is the current holder of these positions. [2]


Banana Republic, formerly a catalog retailer selling safari themed clothing, was purchased by the company in 1983, and eventually rebranded as an upscale clothing retailer. The GapKids line debuted in 1986, babyGap in 1990, and GapMaternity in 2000. Old Navy was launched in 1994, as a value chain with a specialty flair, and Gap Outlet stores were opened the same year. The company launched its current online services in 1995 with gap.com, BananaRepublic.com, and oldnavy.com. [3]In August of 2005, The Gap launched a new chain, Forth & Towne, targeted toward women over 35. However, after a 14 month trial period in 2007, the chain was discontinued and stores closed. [4] The latest brand, Piperline, an online shoe store, was created in 2006. [5]


In December of 1995 the Gap became the first major North American retailer to accept independent monitoring of the working conditions in a contract factory producing its garments. This acceptance came after an international campaign of media criticism and consumer pressure that was organized in Canada by the Maquila Solidarity Network and the Ontario District Council of the Union of Needletrades, Industrial and Textile Employees (UNITE). In the United States the campaign was coordinated by the National Labor Committee.

In 2004, the Gap sold all of its German operations to the Swedish H&M, its main competitor in Europe.[6]

[edit] Criticism

[edit] Worker's Rights / Fair Trade Violations

The Gap has been Criticized for using Sweatshop Labor:

  • In October 2007, Indian authorities raided factories in New Dehli that produce clothing for The Gap. They found children as young as 10 who were sold to the factories by their families, sewing garments for The Gap's children's apparel line. The Gap says the clothes produced at these factories will not be sold in the U.S. and it has ended its contract with the factories. Though The Gap does employ monitors to oversee its factories, there are only 90 monitors for 2,000 factories. Source: ABC7 News, Oct. 29, 2007 [7]
  • A factory in Bangalore, India which contracts primarily with Gap was the site of three deaths in 2007, with at least two of the deaths involving workers not being allowed to leave work during serious medical emergencies. According to reports from a local union, one 39 year old worker began vomiting and asked her supervisors if she could go to the hospital. The woman was not allowed to leave and was “verbally abused” for her request. When she was finally allowed to leave, she was too weak to reach the hospital and collapsed outside the factory, dieing shortly thereafter. This incident followed immediately on the heels of a pregnant worker losing her baby after she was not allowed to leave work after going into labor. The union began investigating the circumstances surrounding the third death. Source: Guardian, Oct. 15, 2007 [8]
  • In May 2004 The Gap released its 2003 Social Responsibility Report which admitted to health and safety problems ranging from unsafe machinery to child labor violations in the thousands of factories it uses around the world to produce clothing. Although the Gap says it has a team of more than 90 compliance officers who conducted about 8,500 factory visits last year, the 42-page report acknowledges "few factories, if any, are in full compliance all of the time." The company said it canceled supply deals with 136 plants last year because of various violations. Contracts were terminated with 42 plants in China, another 42 in south-east Asia, 31 on the Indian subcontinent and nine in Europe.
  • In August 2001, over 400 New York City garment workers protested outside Banana Republic, an affiliate company of the Gap, and two other retail chains over the companies' continued use of sweatshop labor. Union leaders accused the retailers of continuing to foster oppressive labor conditions in the manufacturing of their clothing. As part of the demonstration Rep. Nydia Velazquez (D-Brooklyn) cut her Banana Republic credit card to pieces and Mark Green, a Public Advocate and candidate for mayor of New York City, joined the marchers and said he would enforce a ban on the purchase of city uniforms made in sweatshops.
  • Gap brand caps are made at the BJ&B sweatshop in the Dominican Republic where, according to UNITE, women are paid less than men in violation of Dominican law, workers are hit, touched inappropriately, and belittled, and conditions are unsanitary. Eight cents of each $20 cap goes to workers, who earn approximately $40 after 56 hours of work, in violation of Dominican law.
  • In November 2002 sweatshop campaigners demanded a Holiday boycott against Gap because of alleged evidence that link the clothing retailer to sweatshop labor in six countries. Two groups--Africa Forum and Unite, the union of textile employees, presented evidence of "abusive working conditions" collected from interviews with 200 people in more than 40 Gap-contracted factories in Cambodia, Indonesia, Bangladesh, Lesotho, El Salvador and Mexico. [9]
  • According to the Clean Clothes Campaign, some Gap clothing is manufactured in a Thai factory that has long exploited its workers by underpaying, denying payment of overtime wages, requiring forced overtime work and providing none of the working welfare necessary under Thai law. Employees have been made to work in shifts lasting 12 hours each, while abiding by strict limits on bathroom use. Women workers have also been sexually harassed and violated. Workers who organized a 1998 strike were fired for their activities. Source: The Guardian May 13, 2004, et al [10]
  • In 2003 a GAP worker was shot to death during a worker protest in Cambodia. Cambodian police opened fire to disperse more than 1,000 garment workers who were protesting working conditions and pay. Phnom Penh's deputy police chief Moung Khim said one officer had been killed and 20 wounded when they came under attack from a hail of stones. Source: Sweatshop Watch [11]
  • In April 2003 a federal court on the Pacific island of Saipan approved a $20 million settlement on a class action lawsuit filed against the Gap and 21 other companies. The lawsuit charged that the companies contracted sweatshop labor on Saipan, a U.S. Commonwealth and should be held accountable for worker treatment and conditions in foreign-owned factories operating on U.S. soil. According to the complaint, the more than 13,000 garment workers in Saipan regularly worked 12-hour days, seven days a week, often times "off the clock" without receiving any pay or overtime. The lawsuit also accused Levi Strauss and the other companies of operating a "racketeering conspiracy" through which workers, who are mostly young women, sign contracts waiving their basic human rights and pay recruitment fees of up to $10,000 to secure sweatshop jobs.

    By agreeing to the settlement, the companies admitted no wrongdoing. Source: Associated Press, April 25, 2003 [12]
  • The Clean Clothes Campaign highlighted a series of worker rights violations in global garment supplier Paxar Corporation’s Turkish factory. The Turkish factory and Paxar Corporation have repeatedly tried to destroy trade union activity:

    In early 2005, Paxar fired 11 workers shortly after the union successfully organized the factory and opened negotiations with Paxar. According to the Turkish High Court of Appeal’s decisions, these firings were illegal, and Paxar was ordered to reinstate all 11 workers. The company has yet to take action as per the High Court’s instructions.

    In late 2005, the Turkish factory dismissed at least 4 trade union members. Ayce Bagbakar, who joined the trade union in March 2006, was fired in April 2006. The Clean Clothes Campaign states that these cases, which are still underway, “represent clear-cut unfair dismissals.”

    In August 2006, Textile, Knitting and Clothing Industry Workers' Union of Turkey (TEKSIF) unsuccessfully negotiated with Paxar on issues such as wage and bonus payments. The Clean Clothes Campaign asks consumers to pressure brands that buy from the Turkish factory to express their disapproval over these labor violations. Turkish factory’s clients include Gap, Levi Strauss, Wal-Mart, Disney, Adidas, Puma, and Nike.

    An agreement was finally reached between the trade union and Paxar on February 26, 2007.
    Source: Clean Clothes Campaign, June 18, 2007 [13]
  • In December 2006, the Ethical Trading Action Group (ETAG), in association with Maquila Solidarity Network (MSN) and AccountAbility, released a report entitled "Coming Clean on the Clothes We Wear: Transparency Report Card." This report evaluates and compares 25 apparel retailers and brands in their efforts to address worker rights in their global supply chain. Retailers were rated in areas such as their compliance with International Labor Organization standards (ILO), methods of monitoring code compliance, steps taken to communicate thoroughly, effectively, and transparently to the public, and so forth. Retailers and brands were given a score 0 to 100. Gap earned a score of 71. Source: Maquila Solidarity Network, Dec. 01, 2006 [14]
  • In January 2005, a settlement was proposed in a 2 year old lawsuit against the Gap that accused the company of violating state workers' rights laws by requiring employees to wear the company’s clothing while working. California labor laws that require employers to pay for their workers' uniforms. The law defines uniforms as required clothing of a specific design or brand. Through the proposed settlement the Gap will give about 55,000 current and former workers nearly $1.8 million worth of clothing vouchers. However the Gap maintains that it never forced employees to buy its clothes but instead told employees to look "brand appropriate" and avoid wearing obvious labels belonging to competitors. "We feel strongly that our dress code policies are consistent with state law." Source: Business and Legal Reports, Jan. 28, 2005 [15]

[edit] Political Influence

  • The Gap Inc is the 6th top contributor to Dianne Feinstein (US Senator, California – Gap's home state), contributing $34,000 in 2008. The Gap Inc has consistently been among Dianne's Feinstein's top contributors, contributing over 25,000 each election cycle, since 2004. Source: OpenSecrets.org 2008 [16]
  • The Gap Inc is the 3rd top contributor to Ralph Regula (US Congressman, Ohio – where the Gap Inc also has a major office) contributing $6,900 in 2008. Source: OpenSecrets.org 2008 [17]
  • The Gap Inc also has a Political Action Committee (PAC), where they have spent $51,199 on federal candidates in 2006. Source: OpenSecrets.org 2008 [18]

[edit] Environmental Criticism


  • The Fisher family, founders and executives of the Gap, Banana Republic, and Old Navy clothing chains, purchased 230,000 acres of forest land in Mendocino County, California, and have been logging old-growth redwoods there. The logging will destroy struggling Coho salmon fisheries, wipe out precious wildlife habitat, pollute public drinking water, and permanently degrade the once-magnificent redwood forests of the Mendocino coast. Source: Greenwood Watershed Association

[edit] Business Ethics Complaints


  • In 2002 BusinessWeek named Gap as having one of the worst corporate boards. The company was cited for inside deals including contracts with the chairman's brother to build and remodel stores and a consulting arrangement with the chairman's wife. The magazine also pointed out the interlocking directorship with the Gap's CEO sitting on Apple's board, while Apple's CEO sits on Gap's. Gap's. Source: BusinessWeek, Oct. 7, 2002 [19]

[edit] Praise

  • In 2006, Gap launched their (PRODUCT) RED collection in Gap stores around the world. (Product) Red is the company's latest initiative to build on its long-term commitment to social responsibility. Gap will contribute one-half of the profits from the sale of the Gap (PRODUCT) RED line to the Global Fund to help women and children affected by AIDS in Africa. Source: CRS wire, Oct. 13, 2006 [20]
  • In October, 2007, Gap Inc. announced plans to host a one megawatt (MW) solar power system at its West Coast distribution center in Fresno, Calif. Slated for completion the following year, the system is expected to generate approximately 1.9 million kilowatt-hours (kWh) annually - equivalent to the electricity required to power approximately 350 homes. Source: CSRwire, Oct. 16, 2007 [21]
  • In November 2002 Cambodian union leaders credited the Gap with solving a labor problem at nation's largest garment factory, the South Korean-owned Sam Han Cambodian Fabrics, which is an independent contractor that employs 9,000 people and produces cotton, wool and cashmere sweaters for Gap. A spokesperson from the Coalition of Cambodian Apparel Workers said that workers at the factory had been beaten by hired thugs, offered bribes by management to stop their union organizing, and even shot at. According to the spokesperson nothing was done until "we complained to Gap." A Gap official from the Philippines helped forge an agreement with the factory management to end the harassment of union leaders, form a grievance procedue and meet regularly with union leaders. Source: San Francisco Chronicle, Dec. 12, 2002 [22]
  • In May 2004, Gap published its first social responsibility report that outlined a variety of labor violations, as well steps it is taking to remedy the problems. Executives reported that Gap was taking “concrete, constructive steps” to remedy the most common violations, including health and safety problems, as well as instances of forced and coerced labor. The report also detailed other aspects of Gap’s social responsibility practices, including community giving and volunteerism Source: Ethical Corporation, May 14, 2004 [23] The most recent report, as well as past data, can be found on the Gap, Inc. site at www.gapinc.com/socialresponsibility.
  • Starting in February 2005 hundreds of Gap employees displaced for three months by extensive Colorado store remodelings are being farmed out by the company - with pay - to volunteer at local nonprofits. The employees will split their time between working at the non-profits and company training programs. The company also offers a program that allows headquarters employees five hours a month of paid time to volunteer in the community and another that contributes $150 to a nonprofit for every 15 hours an employee volunteers there. Source: The Denver Post, Dec. 22, 2004 [24]
  • According the the Los Angeles Times, "Gap is now viewed as a leader in the small but growing corporate movement to improve conditions for some of the world's most exploited workers." The paper states that the company has wielded its buying power in Africa, Central America, and Cambodia to help improve factory conditions and is encouraging other manufacturers to follw suit. "No one company created these issues, and no one company can fix it by itself," said Alan Marks, Gap's chief spokesman. Source: Los Angeles Times, Jan 17, 2005
  • In April 2004 UNITE and Gap announced that they will support an effort by displaced garment workers in El Salvador to open that country's first independent and fully unionized apparel export factory. UNITE and Gap Inc. also said they plan to regularly discuss ways to cooperatively address garment factory issues that are of mutual concern to both organizations. Source: CSRwire [25]
  • The Gap has agreed to stop using leather from India, where cows are said to face cruel treatment despite their sacred status. The company has pledged to continue the ban until the government improves conditions under which the animals are transported and slaughtered for leather and meat. Source: Reuters, May 31, 2000 [26]
  • Gap is doubling their employees’ contributions for tsunami relief through GlobalGiving, a global internet portal acting as an 'E-Bay' for social and economic growth of developing countries that has dedicated web space for relief and reconstruction within the tsunami disaster zone. Source: CSRWire
  • In September 2004, after the devastation left by Hurricanes Charley, Frances and Ivan, the Gap Foundation pledged $50,000 to the American Red Cross to aid its disaster relief efforts. The Foundation also announced plans to doubling matches for Gap employee contributions. The Foundation's Gift Match program, which offers a dollar-for-dollar match for all part- and full-time Gap Inc. employees around the world, was increased to match two-for-one for contributions made by employees to the American Red Cross' Disaster Relief Fund. In addition, for every 15 hours an employee volunteers with the Red Cross, Gap Foundation said it would contribute $300. Source: CSRWire [27]
  • The Gap achieved a score of 100 on the Human Rights Campaign 2008 Corporate Equality Index which rates large corporations on policies that affect their gay, lesbian, bisexual and transgender employees, consumers and investors. The 2008 HRC Corporate Equality Index rated companies on a scale of 0 percent to 100 percent on six factors. [28]
  • Since 1994, Gap has offered domestic partner health benefits to employees' domestic partners of the same sex. Source: Human Rights Campaign [29]
  • The Gap has a non-discrimination policy that includes sexual orientation. Source: Human Rights Campaign [30]
  • Gap was one of the winners of the 16th Annual Business Ethics Awards, announced on December 13, 2004 by Business Ethics magazine. Specifically, Gap received the Social Reporting Award for “unprecedented honesty in reporting on factory conditions” in their 2004 Social Responsibility Report. Source: CSRWire [31]
  • In April 2004 Gap was accepted into membership in the Ethical Trading Initiative, an UK alliance promoting the implementation of international labour standards. ETI aims to ensure conditions for workers producing goods for the U.K. market meet or exceed international labor standards. The ETI alliance includes 37 corporations, 16 non-governmental organisations, and U.K. and global trade unions. Source: Ethical Corporation [32]

[edit] Brands & Subsidiaries

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