Fair Trade Fashion – How Do You Define ‘Fair’?

Buy a pair of jeans, and the chances are they’ll have travelled further across the globe in their short life than you.

The clothing and apparel industry is a complex one. It is now common for a piece of clothing – let’s take that pair of jeans, for example – to be made up of components from five or more countries, often thousands of miles away, before they end up in our high street store where you buy them.

Fair trade fashion aims to create clothing and accessories that take into account their impact on the producers who make the goods at all the different stages of its production. Ethical fashion companies are not engaged in a ‘race to the bottom’ in pursuit of the very cheapest products at the expense of producers’ livelihoods and their environment. Ultimately, this is an international trading system built on equitable relations and fair dealings.

So far, so good. But how do you define the notion of ‘fair’?

Although there is no universally accepted benchmark for what a fair price is, it is generally accepted that producers earning a fair wage are able to live relatively comfortable lives within the context of their local area. This means enough money for housing, a generous amount of food, health care, education for children, and some disposable income.

Commodities such as coffee, tea and fruits offer a very simple economic model. They are traded in commodity markets daily, resulting in a global market price. Importers can simply pay a premium above that market price and they are following the rules set down by the major certification schemes.

Manufactured, of ‘finished’, goods like clothing or jewellery or accessories are much more complicated because components often come from literally dozens of sources. Also, wages, labour laws, and factory conditions are much more difficult to monitor compared to commodity prices. So for example, it becomes very difficult to define what constitutes an ethically-sourced pair of jeans.

That’s why fair trade fashion items are not all certified and stamped yet. It’s not that they are trying to con you. It’s just that the companies are ahead of the certification bodies.

However, as a consumer you can easily identify some key practices and attributes that an fair trade fashion company should pursue if it is genuinely working in an ethical way.

Firstly, the very fact that enterprises are working with value-added goods, like jeans or necklaces, is positive. Although the trade in coffee is fantastic, coffee is just a raw material, the real value of which is gained when you use those beans to make a cappuccino. When you buy a fair trade coffee in London or New York or Paris, the farmer obviously benefits, but the great majority of the price you pay goes to the coffee company, not the farmer in coffee farmer in Ethiopia or Colombia. The value-added element, which is a posh way of explaining how some beans and hot water and milk can be sold for £2.50 or $4, goes into the pockets of European or US companies.

With fair trade fashion, producers are essentially exporting finished products, for which there is a higher added-value, rather than just raw materials. Continuing with the example of the pair of jeans, the producers are exporting a finished pair with pockets, a zipper and button, not just reams of denim in a roll. So they are benefiting by earning more money and gaining more skills. This is a huge benefit to producers in developing countries.

In addition, in the world of fair trade fashion, companies tend to work with eco-friendly products such as organic cotton, organic wool, recycled fabrics and natural dyes. This has huge environmental benefits.

Ethics in fashion is growing, and with more and more top designers becoming involved in the movement, and sustainability growing in importance, this is an issue that isn’t going to disappear. The certification bodies are likely to catch up with the leading companies to introduce some kind of labelling system. And when the storm clouds of the global economy start to move away, this movement will still be there.

Because the bottom line is that the low-cost-at-any-cost global economy just isn’t sustainable.

Commercial Agents – How to Negotiate Leases in Commercial Property Today

When it comes to commercial property leasing and performance, the lease that you negotiate is really a key part of the process. Lease negotiation today can be protracted and lengthy. The landlord and or the property manager need to be aware of lease negotiation practices that apply to their property type and local area, and have a system to implement when they are leasing vacant premises.

At the outset, it should be said that a good property solicitor is highly valuable to the lease negotiation process. The commercial real estate agent is really only there to negotiate the lease and is not a lease preparation specialist. The agent brings the parties together through a comprehensive marketing campaign targeted to the right type of tenants. That is why they are paid the commission. The solicitor should then take over the lease documentation process to ensure that a correct and comprehensive lease document is created for the particular occupancy situation.

There are many types of landlords out there owning diverse and different properties. Regrettably the smaller property investors commonly tend to cut corners in legal costs or seek low cost lease documentation. The end result is a lease document that generically relates to the property.

It is best to get a solicitor involved in each and every lease document after the agent has negotiated the basic elements of the lease. A heads of agreement is appropriate for this process and that agreement can then be given to the solicitor to structure final documentation in legal form.

Here are some other main elements to consider in negotiating leases in commercial or retail property:

  1. Form a decision as to how long the premises should be leased in the initial term. This term should comply with the changes to the property that the landlord requires including any refurbishment strategies or relocation situations.
  2. Many landlords do not like options for a further term being given to tenants. Whilst you have to comply with property legislation relating to leasing, the issue of options really does need to be considered before the tenant asks for such. Options should only occur if the landlord can comfortably allow the tenant to remain in occupancy in the location. Due regard should also be given to the other adjacent tenants in occupancy and their needs for expansion.
  3. The type and amount of rental to be asked for should be clearly set before the marketing of any vacant tenancy occurs. Whilst it is permissible for a landlord to negotiate rental downwards, it is important that the asking rental is comparable to market rental; otherwise you won’t get any enquiry from the marketing of a vacancy.
  4. Understand the outgoings for the premises and how you are going to recover those costs for the landlord. The decision here will have impact on the net and gross rents that you may select.
  5. Prepare the premises for inspection and presentation. Whilst many landlords prefer to not spend any money until tenants are found, this process can be counterproductive and dissuade tenants from entering into negotiation for the vacancy. Essentially a vacant tenancy needs to look its best before tenants are taken through for the inspection. To achieve this you may need to paint the premises, reinstate the ceiling tiles, and replace the floor coverings.

The negotiation of a commercial or retail property lease is a planned process. By taking these and other steps early you can reduce the number of problems that you have in the lease negotiation process.

Commercial Agents – How to Deal With Difficult Landlord Clients

When you work in a commercial or retail real estate agency, it is easy to get frustrated with demanding landlords and difficult property situations. When the property market is under pressure, landlords are seeking greater assistance from the agents that they use (that’s us). Frustration and pressure will arise in many an agency and landlord relationship as the property market goes through change.

Comprehensive Service

In a tough property market, the commercial real estate agents that comprehensively service all property needs are those that are in demand. A well leased and managed property will eventually be sold. Every stage of the client relationship today requires special skills in the agency across leasing, sales, and property management.

Understanding the factors of change in the property market today and how to adjust for them is critical to helping clients with property pressures. The reality of the current property market is that control, strategy, results, and information are really the main factors that the landlord is looking for in moving ahead. The fact is they need our help. We are the best providers of strategic solutions when it comes to property occupancy, returns on investment, and disposal strategies.

Here are some further strategies to use with landlords in this tougher property market.

  1. Keep them up to date with property and lease issues with all tenants in the tenancy mix and the adjacent properties. Work well in advance when it comes to lease documentation and critical dates. Every lease in the subject property should be reviewed for future events and pressures on cash flow.
  2. Market information will change from time to time. Competing properties will also put some pressure on surrounding property sales and property leases. Keeping clients and landlords briefed on the pressures of the competition properties is quite important.
  3. Lease negotiations will occur with sitting tenants and new tenants from time to time. Importantly the negotiation should occur with due regard to the prevailing market conditions. That will include terms of rental, terms of lease, and incentives. The landlord can be positioned for a competitive lease transaction when all elements of the property market are clearly assessed and provided.
  4. The quality of tenants within the tenancy mix, and the threats of vacancy are two highly important issues to be managed and optimized. Both will have impact on the property income profile and tenancy mix. What threats emanate from the property tenant mix now?
  5. Stay in touch with all tenants within the tenancy mix on a regular basis. They are likely to need lease adjustments or changes of occupancy from time to time. If they are good tenants and considered worthwhile for the future of the property, then negotiations should be open and encouraged. It is better to have a stable occupancy than the volatility of increasing vacancies.
  6. Good lease management processes can be incorporated into a business plan for the property. Each year the property can be reviewed in a number of ways with the results being incorporated into the business plan. The plan would include lease reviews, tenancy mix, income profiles, expenditure budgets, and renovation strategies.

Difficult landlords are really just looking for further help and specialized assistance. It is quite likely that they and their property are under some pressures. Improve your services as a specialized commercial agent so that you can help these landlords achieve better levels of property performance in difficult times.