Chris K.Y. Lo

The Coordination of Fashion Supply Chains With a Risk-Averse Supplier Under the Markdown Money Policy

Motivated by the popular markdown money policy (MMP) in the textiles and clothing (TC) industry, in this paper, we explore how this policy performs in a two-stage TC/fashion supply chain with an upstream risk-averse manufacturer (supplier) and a downstream risk-neutral retailer. Specifically, we investigate both the optimal decisions of the risk-averse supplier with respect to the MMP contract parameters and the optimal ordering decision of the risk-neutral retailer so that the whole supply chain can be coordinated (i.e., optimized). We then conduct a numerical study with the real data from two companies to explore the performance of the optimal MMP proposed in our paper. Important insights and specific implications to the industry practitioners are discussed.

The impact of ethical fashion on consumer purchase behavior

– The purpose of this paper is to examine the relationship between ethical fashion and consumer purchase behavior (their willingness to pay a premium for ethical fashion), with the focus on consumers’ concerns and beliefs about, and knowledge of, ethical fashion., – A self‐completion questionnaire was administered to 109 respondents. Factor analysis and other statistical analyses were applied to test hypotheses., – The findings suggest that consumer beliefs about ethical fashion, which are based on their perceptions of a company in terms of its reputation in the fashion industry, influence their support for what they perceive as socially and environmentally responsible businesses., – The sample size, which is relatively small, is a limitation for this research. The data were collected in Hong Kong, limiting findings to that geographic region., – An important implication is that consumer education is essential to mitigate the prevailing throwaway culture and raise consumer awareness of ethical issues facing the fashion industry. Thus, retailers should take initiatives to educate consumers so as to ensure the success of their newly‐launched ethical fashion products., – The paper proposes an approach to clearly understand the impacts of ethical fashion on consumer purchase behavior.

A tough pill to swallow

Purpose – The purpose of this paper is to investigate the impacts of voluntary Occupational Health and Safety Management System (OHSMS) certification (i.e. OHSAS 18001) on fashion and textiles‐related companies’ financial performance.Design/methodology/approach – From all US‐listed fashion and textiles‐related companies, 44 companies that obtained OHSAS 18001 certification were used as samples. A long‐horizon event study was conducted to estimate the sample companies’ abnormal changes of sales and return‐on‐assets (ROA) over non‐OHSAS 18001 adopters in the same industry.Findings – The authors found that OHSAS 18001 adoption has a positive impact on fashion and textiles‐related company’s sales performance. Nevertheless, the OHSAS 18001 adoption has a negative impact on the companys ROA performance.Originality/value – Because of the increasing fashion customers’ attention on the occupational health and safety (OHS) issues on personal goods, such as fashion, apparel and beauty products, major fashion brands...

Disruptive information technology innovations and the cost of equity capital

We examined whether disruptive IT innovations affected equity financing cost.We used longitudinal data from 146 U.S. listed firms that adopted RFID.RFID adoption significantly reduced the cost of equity capital for adopting firms.The reduction was larger under greater CEO incentives and coercive pressure. Disruptive information technology (IT) innovations not only present opportunities, but also cause uncertain impacts on firm risk that affects the equity financing cost of a firm. This paper used longitudinal data from 146 U.S. listed firms that adopted radio frequency identification (RFID), a disruptive technology that enables supply chain process innovation. Results show that firms that adopted RFID significantly reduced their cost of equity capital, and the reduction was stronger for firms with greater CEO incentive-based compensation and coercive pressure. The findings help managers make strategies that maximize the benefits of disruptive IT innovations.

Environmental Incidents and the Market Value of Firms: An Empirical Investigation in the Chinese Context

We examine firms listed on the Shanghai/Shenzhen Stock Exchange to investigate stock market reactions to 294 Chinese manufacturing firms involved in 618 environmental incidents between 2006 and 2013. Through our event studies, we find empirical evidence of a significantly negative stock market reaction to announcements of environmental incidents. Our empirical analysis reveals that Chinese firms with a higher government share (of ownership) and recognition of social responsibility tend to be less affected by such incidents; however, Chinese firms with stronger personal political ties (i.e., top management teams or board members with concurrent or prior government appointments) are actually affected more when environmental incidents occur. Moreover, environmental incidents caused by Chinese firms can have a significantly negative impact on the market value of their overseas customers. The online appendix is available at https://doi.org/10.1287/msom.2017.0680.

Luxury Fashion Brands Versus Mass Fashion Brands: Data Mining Analysis of Social Media Responses Toward Corporate Sustainability

Today’s consumers are increasingly concerned with social and environmental issues, leading to more conscientious consumption decisions and practices. As the core consumers’ characteristics are vastly different between luxury and mass fashion brands, it is expected that consumers’ social media responses would be highly varied as well. Therefore, this study aimed to explore consumer social media behavior when exposed to corporate sustainability messages and discover potential differences in responses between luxury and mass fashion consumers. To achieve the objective of the study, 89,290 raw data were obtained from Twitter through Python. Given that there might be differences in consumer responses toward corporate 378 sustainability messages between luxury and mass fashion brands because of distinctively different characteristics in their target consumers, this study explored 380 consumer social media behavior and looked for potential differences in responses 381 between the two groups of consumers. After analyzing over 89,000 tweets and 382 retweets made by 11 luxury and 11 mass fashion brands as of March 2017, the 383 study found several interesting results. Overall, the analysis of Twitter messages suggests that luxury fashion brands are less communicative with consumers about their sustainability activities than mass fashion brands. This indicates fewer tweet and less loud, yet effective in what they communicate might be luxury brands’ strategies. Indeed, the findings do show that consumers look for leadership in luxury brands, as they tend to like or retweet more messages generated from luxury brands when their messages are focused on sustainability.

Opening: Sustainability and Luxury Brands

This chapter highlights the importance of exploring sustainability issues for luxury brands, and then it summarizes the key highlights of each chapter of this book (i.e., chapter 2 to 10). We start by addressing the question “Is sustainability an attainable goal for luxury brands?”. Through the discussion of the tensions between the luxury brand traditional operations and sustainability, this chapter provides the reasons for luxury brand incorporating sustainability goals into their operations, while continuing their focus on quality and artisanship.

The Drivers and Barriers of Luxury Sector Retailers to Adopt Energy Efficiency Technologies in Hong Kong

In recent years, many fashion brands and retailers have been under pressure to achieve environment-friendly production and operations. To reduce carbon footprints, retailers are seeking ways to adopt energy efficiency technologies (EETs), to have better control of energy consumption through technology improvement or substitution. The application of EETs has been researched in developed countries, such as the European Union and the USA, in areas of public and mainly manufacturing sectors. Some large-scale general merchandise retailers, like Walmart, are also widely reported for their adoption of adopting ISO 14001 environment management system, and ISO 50001 energy management system, and many EETs. However, it is not clear how EETs are being implemented in luxury retailers, which tend to be smaller in size located in major metropolitan cities. The energy efficiency of retail shops in major fashion cities, such as New York, London, Paris, and Hong Kong (HK) is largely neglected in the literature. To explore how luxury sector retailers in major cities implement EET, we selected HK as our research context. HK, being one of the largest and competitive luxurious product markets (HK’s all retail sales in 2016 was US

The impact of environmental management systems on financial performance in fashion and textiles industries

56 billion of which luxury products amounted about US

ISO 9000 and supply chain efficiency: Empirical evidence on inventory and account receivable days

10 billion), has long been suffered from light pollution due to the spot lights on large billboards on buildings, and the window display of brick and mortar stores on the street. The lightings are always on that also brings serious concern on energy consumption. This chapter shall review the application of EETs, such as renewable energy technologies, sophisticated lighting devices, battery technologies, energy-saving devices, and smart energy management, in the luxury sector retail industry of HK. In this paper, we reviewed both drivers and barriers of the application of EETs in the HK’s luxury retail sector. The discussions are based upon interviews of renowned luxury goods retail chain stores in HK. Six luxury and premium brands (i.e., jewelry, luxury watches, fashion) retail chain stores are chosen, and in-depth interviews were conducted with their senior managements, who are responsible for the decisions of EETs adoption (if any). The samples include both private and publicly listed companies, and their number of stores range from 5 to thousands retail outlets in HK and China. We believe the findings could be applied into other retailers in luxury sectors. A conceptual model, Energy Sustainability Strategy Model on EETs adoption, is also proposed.