The ugly secret behind a hot fashion brand

The online retailer makes fast fashion for the Instagram elite. The way many of its garments are made is much less glamorous.

Fashion Nova has perfected fast fashion for the Instagram era.

The mostly online retailer leans on a vast network of celebrities, influencers and random selfie takers who post about the brand relentlessly on social media. It is built to satisfy a very online clientele, mass producing cheap clothes that look expensive.

"They need to buy a lot of different styles and probably only wear them a couple times so their Instagram feeds can stay fresh," Richard Saghian, Fashion Nova's founder, said in an interview last year.

To enable that habit, he gives them a constant stream of new options that are priced to sell.

The days of US$200 ($300) jeans are over, if you ask Saghian. Fashion Nova's skintight denim goes for US$24.99 ($38). And, he said, the company can get its clothes made "in less than two weeks," often by manufacturers in Los Angeles, a short drive from the company's headquarters.

That model hints at an ugly secret behind the brand's runaway success: The federal Labor Department has found that many Fashion Nova garments are stitched together by a workforce in the United States that is paid illegally low wages.

Los Angeles is filled with factories that pay workers off the books and as little as possible, battling overseas competitors that can pay even less. Many of the people behind the sewing machines are in the country illegally and unlikely to challenge their bosses.

"It has all the advantages of a sweatshop system," said David Weil, who led the US Labor Department's wage and hour division from 2014 to 2017.

Every year, the department investigates allegations of wage violations at sewing contractors in Los Angeles, showing up unannounced to review payroll data, interview employees and question the owners.

In investigations conducted from 2016 through this year, the department discovered Fashion Nova clothing being made in dozens of factories that owed US$3.8 million ($5.7 million) in back wages to hundreds of workers, according to internal federal documents that summarised the findings and were reviewed by The New York Times.

Those factories, which are hired by middlemen to produce garments for fashion brands, paid their sewers as little as US$2.77 ($4) an hour, according to a person familiar with the investigation.

The Labor Department declined to comment on the details of the investigations. In a statement, a spokeswoman said the department "continues to ensure employers receive compliance assistance with the overtime and minimum wage requirements, and the Wage and Hour Division is committed to enforcing the law."

After repeated violations were found at factories making Fashion Nova clothes, federal officials met with company representatives.

"We have already had a highly productive and positive meeting with the Department of Labor in which we discussed our ongoing commitment to ensuring that all workers involved with the Fashion Nova brand are appropriately compensated for the work they do," Erica Meierhans, Fashion Nova's general counsel, said in a statement to The Times. "Any suggestion that Fashion Nova is responsible for underpaying anyone working on our brand is categorically false."

In 2018, Saghian said about 80 per cent of the brand's clothes were made in the United States. Fashion Nova's supply chain has shifted since then, and now the brand says it makes less than half of its clothes in Los Angeles. It would not specify the overall percentage made in the US.

The company does not deal directly with factories. Instead, it places bulk orders with companies that design the clothes and then ship fabric to separately owned sewing contractors, where workers stitch the clothes together and stick Fashion Nova's label on them.

The brand's clingy dresses and animal print jumpsuits are often made by people like Mercedes Cortes, working in ramshackle buildings that smell like bathrooms.

Cortes, 56, sewed Fashion Nova clothes for several months at Coco Love, a dusty factory close to Fashion Nova's offices in Vernon, California. "There were cockroaches. There were rats," she said. "The conditions weren't good."

She worked every day of the week, but her pay varied depending on how quickly her fingers could move. Cortes was paid for each piece of a shirt she sewed together — about 4 cents to sew on each sleeve, 5 cents for each of the side seams, 8 cents for the seam on the neckline. On average, she earned US$270 ($410) in a week, the equivalent of US$4.66 ($7) an hour, she said.

In 2016, Cortes left Coco Love and later reached a settlement with the company for US$5,000 in back wages. She continued to work in factories sewing Fashion Nova clothes, noticing the US$12 price tags on the tops she had stitched together for cents.

"The clothes are very expensive for what they pay us," Cortes said.

"Consumers can say, 'Well, of course that's what it's like in Bangladesh or Vietnam, but they are developing countries,'" Weil said. "People just don't want to believe it's true in their own backyard."

For all their seediness, these factories are still producing clothes for major American retailers. Under federal law, brands cannot be penalised for wage theft in factories if they can credibly claim that they did not know their clothes were made by workers paid illegally low wages. The Labor Department has collected millions in back wages and penalties from Los Angeles garment businesses in recent years, but has not fined a retailer.

This year, Fashion Nova's labels were the ones found the most frequently by federal investigators looking into garment factories that pay egregiously low wages, according to a person familiar with the investigations.

In September, three officials from the department met with Fashion Nova's lawyers to tell them that, over four years, the brand's clothes had been found in 50 investigations of factories paying less than the federal minimum wage or failing to pay overtime.

The company's lawyers told the officials that they had taken immediate action and had already updated the brand's agreement with vendors. Now, if Fashion Nova learns that a factory has been charged with violating laws "governing the wages and hours of its employees, child labor, forced labor or unsafe working conditions," the brand will put the middleman who hired that factory on a six-month "probation," it said in a statement.

The working relationship would continue, unless workers file another complaint against the same factory or another one that the contractor hired during those six months. At that point, the brand will suspend the contractor until it passes a third-party audit.

While Fashion Nova has taken steps to address the Labor Department's findings, Meierhans, the brand's general counsel, noted that it works with hundreds of manufacturers and "is not responsible for how these vendors handle their payrolls."

"Everyone wants to have more followers"

Saghian opened the first Fashion Nova store in 2006, in a Los Angeles mall. Seven years and four storefronts later, he realized that he was losing customers to online outlets selling the same clothes.

A web developer talked him out of starting a website; it would get no traffic, because no one knew what Fashion Nova was. Saghian had a better shot on Instagram, where "there were some really basic boutiques that had 300,000 followers," he said in the interview.

In 2013, Saghian opened an Instagram account and began posting photos of his clothing on mannequins and customers. He noticed that some of his stores' regular visitors were influencers he had seen on Instagram, where they had hundreds of thousands of followers.

"I had rappers' girlfriends, female rappers, models," he said.

Saghian started giving them free clothing and they posted photos of themselves draped in Fashion Nova garb. In turn, he reposted their photos and tagged their handles.

"Everyone wants to be famous. Everyone wants to have more followers," Saghian said. "By tagging them, the influencer would grow their following."

Gradually, the strategy brought Fashion Nova from the outskirts of the internet into the mainstream. The brand earned mentions on hip-hop tracks. In 2017, its sales grew by about 600 per cent.

Cardi B, the Grammy-winning rap star, unveiled her first collection with the brand in an Instagram video in November last year.

"I wanted to do something that is like, 'Wow, what is that? Is that Chanel? Is that YSL? Is that Gucci?' No," she said, adding an expletive, "it's Fashion Nova."

All 82 styles in Cardi B's collection sold out hours after they became available. She posted another video the same night, promising a full restock "in two or three weeks." (Cardi B's line is made in Los Angeles, but the government has not found any of the clothes in factories where workers have alleged they were paid less than the minimum, Fashion Nova said.)

There were more searches for Fashion Nova last year than for Versace or Gucci, according to Google's year in search data. It has 17 million followers on Instagram, and at any given moment there are enough people browsing clothes on its website to fill a basketball arena, Saghian said.

To keep them interested, Fashion Nova produces more than a thousand new styles every week, thanks in part to an army of local suppliers that can respond instantly to the brand's requests.

"If there was a design concept that came to mind Sunday night, on a Monday afternoon I would have a sample," he said.

"The best possible price"

Many of the people vying for Saghian's business occupy glass-walled storefronts jammed into the six frenetic blocks of the garment district in downtown Los Angeles.

These are the companies that design clothing samples and sell them in bulk to Fashion Nova and other retailers. Those businesses outsource the job of making clothes to nearby factories that work as subcontractors.

In November, The Times visited seven companies that got Fashion Nova clothes made in factories that underpaid workers, according to the Labor Department investigations. Some spoke freely about their work with the brand. Others refused to comment or talked on the condition of anonymity, fearing that they might lose the company as a client if they went on the record.

The five owners and employees who agreed to be interviewed said Fashion Nova would always push to pay the lowest price possible for each garment and would demand a quick turnaround.

"They give me the best possible price they can give it to me, for that will allow them to still break a profit," Saghian said.

The companies can negotiate with Fashion Nova, but their power is limited. A dwindling number of retailers are still doing business in Los Angeles, and a couple of big orders from Fashion Nova can keep a small garment shop afloat for another year. So they look for subcontractors who can sew clothes as quickly and cheaply as possible.

Amante Clothing, which occupies a stuffy storefront filled with racks of colorful samples, regularly works with Fashion Nova. The brand paid Amante US$7.15 per top for a bulk order last year, according to a Labor Department investigation conducted last December. Amante then went to a sewing contractor called Karis Apparel, which made the tops.

Amante paid Karis US$2.20 to sew each garment, the Labor Department found. Fashion Nova sold the top for US$17.99.

"We don't own the sewing contractor, so whatever the sewing contractor does, that's his problem," said a designer at Amante, who declined to be named for fear of losing her job. "We don't know what they do to give us the lowest price. We assume they're paying their employees the minimum."

Karis went out of business in April. Another manufacturer ensnared in the investigations moved production to Mexico this year.

But many more factories have evaded punishment.

Same owners, different names

When Teresa Garcia started working at Sugar Sky, it was called Xela Fashion. It was 2014, and Xela Fashion, state records show, was owned by Demetria Sajche, a woman whom Garcia was told to call Angelina.

Several months later — Garcia does not remember how many — the name on her checks had changed, though she worked in the same grungy factory in the heart of downtown, a few blocks from a SoulCycle.

Now her employer was called Nena Fashion, a company that was founded by Leslie Sajche, a relative of Garcia's boss, according to business records filed with California's secretary of state. About a year after that, the name changed again, to GYA Fashion.

In 2017, the factory moved to an industrial stretch of Olympic Boulevard in East Los Angeles and began using a new new name: Sugar Sky. About a year later, Sajche stopped running the day-to-day operations and handed the job over to Eric Alfredo Ajitaz Puac, whom workers knew as her boyfriend.

Garcia said that she believed the point of all the name changes was to avoid being shut down by federal or state officials. Several workers, including Garcia, have filed claims against Xela, Nena, Gya and Sugar Sky for back wages with California's labor commissioner, the state agency that handles such disputes.

In her claim, which is active, Garcia included checks showing she earned as little as US$225 for 65 hours of work in a week, the equivalent of US$3.46 an hour. She remembers the factory's receiving orders from Fashion Nova for up to 5,000 pieces of clothing at a time.

"They needed it so fast, they couldn't wait," Garcia said of the brand. "We would need to turn it around within a week."

Weeks of trying to reach Puac and Sajche were unsuccessful. A trip to Sugar Sky's last known location just before Thanksgiving found a furniture store. Neighbours said the garment factory had packed up and moved out two months earlier.

Fernando Axjup, who was listed as an owner of one iteration of the factory, agreed to an interview. He was recently fired from the company and had filed his own claim for back wages.

"They keep changing their names so they don't have to pay people," Axjup said. "There was a lot of exploitation." As a manager, he had access to payroll data and said Garcia rarely earned the minimum wage.

Axjup suggested that perhaps he had been fired for standing up for workers like Garcia. Garcia said she doubted that, given that Axjup was the one ordering her to hurry up.

He said he could never figure out why Fashion Nova did not visit the factory floor to check on how its clothes were being made for such low prices.

"Supposedly, the brand should supervise the people who give them work, to find out whether they are being paid well," Axjup said. "But they never do. They never came to see."

Written by: Natalie Kitroeff

Photographs by: Jessica Pons

© 2019 THE NEW YORK TIMES