Macy’s Alleged Sweatshop Goods Prove Counterfeit

The New York State Department of Labor might have been a bit hasty when it included Macy?s Inc. as one of the retailers alleged to be utilizing a sweatshop.

NEW YORK — The New York State Department of Labor might have been a bit hasty when it included Macy’s Inc. as one of the retailers alleged to be utilizing a Queens sweatshop to produce its goods.

This story first appeared in the July 30, 2008 issue of WWD.  Subscribe Today.

On July 23, state DOL officials revealed an investigation had uncovered significant labor violations at two factories allegedly manufacturing garments for Macy’s, Gap, Banana Republic, Express, Victoria’s Secret, Limited and Coldwater Creek.

But Macy’s said Tuesday that an internal investigation found the garment factory identified by the DOL was not manufacturing goods for the retailer. However, one of the factories was producing counterfeits of Macy’s private label brands, the store said.

“There is no place in Macy’s stores for goods that are manufactured by workers who are underage, underpaid or forced to work in conditions that are illegal,” said Janet Grove, vice chair of Macy’s Inc. and chairman of Macy’s merchandising group. “We have cooperated fully with the Department of Labor and applaud the department for its vigorous enforcement.”

Jin Shun Inc., a garment contractor operating out of Long Island City in Queens, is alleged to have underpaid more than 100 mostly immigrant workers by nearly $3 million in minimum wage and overtime pay since 2005. The investigation found that prior to 2005, Jin Shun Inc. operated under the name Venture 47 and allegedly withheld nearly $2.5 million in minimum and overtime wages. Officials are seeking repayment of the more than $5 million total owed to workers since before 2005. Both companies are owned by Jikai Lin and Zhang Yun Chen.

When officials raided two facilities last Wednesday morning, they tagged more than 10,000 garments with a label stating the garments were unlawfully manufactured. The garments included items for Express and the Macy’s private label brands Ultra Flirt and INC.

Macy’s said the second raided factory, operating under the name Zheng Da Inc. and also in Long Island City, was manufacturing counterfeit private label merchandise from previous seasons. The retailer also found that third-party monitors hired by Macy’s had inspected the Jin Shun factory twice in 2007 and rejected using the facility due to incomplete employment record keeping.

“This case reinforces the importance of our process for monitoring the suppliers and factories that make products sold at Macy’s,” Grove said. “The Jin Shun factory did not meet our requirements and thus was prohibited from manufacturing for our stores. Yet the experience with these Long Island City factories reminds us that we need to remain vigilant because some potential suppliers clearly are not up to the high standards we set.”

A call for comment to the NYDOL was not returned by press time.