A sustainable discounter, it seems like two worlds that cannot be reconciled. But you don't have to come up with that story to Erik-Jan Mares, the CEO of Zeeman. On the contrary, the textile discounter is stepping up its efforts to achieve its green and social ambitions. And yes, it helps if you have the shareholders on your side.
Looking out for each other, that's what Erik-Jan Mares learned at a young age. Zeeman's CEO grew up as the eldest of four children, so it's quite a busy affair. And such a large family only functions if everyone looks out for each other.
"I learned early on to look beyond myself," he says. "And I was brought up with the principle that you give more than you take. That's why the match with Zeeman is so great.'
Later, Mares will also say, almost surprised, that he does not often give interviews that are purely about Zeeman's sustainability strategy. "Don't you want to talk about the sales figures?" This green course was therefore rolled out in relative silence for a long time.
It's only been about a year and a half since the textile supermarket has been making more noise. The kick-off was with a campaign in which consumers could ask all their pressing questions ('3.49 euros? Made by children, surely?'). These were bundled and, together with the answers, put online.
Accelerating CSR
Since that campaign, now more than a year ago, Zeeman has gained momentum, according to the latest CSR report. The current living wage program has been expanded to ten partner factories. This means that the company, for its own share of production, supplements the salaries of the employees to an amount with which they can meet their necessities of life (the legal minimum wage is often not high enough).
Zeeman also mapped out the environmental impact of the supply chain for the first time, exceeded its own goal for more sustainable material use and put a buyer on the circular transition.
That last part is the most visible to consumers; Clothing is now collected in more than a thousand of the 1,352 branches with recycling organization Het Goed. Some of them find their way back to the Zeeman stores, on hangers in the newly introduced vintage departments. These can now be found in ten branches; By the end of the year, there should be considerably more.
Zeeman is going faster than the average retailer. Is this acceleration necessary in order to still have the right to exist in, say, ten years' time?
Erik-Jan Mares: 'From a strategic point of view, that is certainly true, although perhaps not everyone thinks about it that way yet. The commitment to sustainability comes mainly from us, the management. However, taking care of the people in the chain has been a spearhead of our founder, Jan Zeeman, from the start. Of course, the short-term results are important. Nobody likes it when a bad quarter is made, including us. But the long-term course comes first. So we're taking more space to put sustainability high on the agenda.'
'Of course, the financial results have to be in order. Without a solid foundation, we cannot make the necessary investments. But profit optimisation for the shareholder is not the greatest asset for us.'
In your case, it is the Zeeman family, which owns 100 percent of the shares. What do they think of the CSR strategy?
"For the family, it's part of getting the company ready for the next generation. The grandchildren (of founder Jan Zeeman, ed.) have been very involved in this. These are children of our time, they know very well what is going on.'
How do you look at the tension between profit and ESG? Unilever is a striking example: once a green frontrunner, its sustainability ambitions have now been scaled back under pressure from shareholders.
'We are well aware that the fact that we are only dealing with the Zeeman family, and that they support us in our endeavours, makes the implementation a lot easier. But in a general sense, I'm not really worried about this.'
'I see it as a temporary hurdle that we all have to overcome, in order to eventually come to the understanding that you can only continue to exist sustainably if it's both-and: a healthy financial foundation and a business model that pays attention to the planet and people. We are moving towards a new equilibrium. That goes forward and backward in steps, but the underlying movement is one forward.'
'Zeeman is a member of the Dutch Sustainable Growth Coalition, a partnership of eight large Dutch companies, with the aim of stimulating the development of sustainable business models. Last week we met again with all the participating CEOs. The will is there, I see that in them too. We share the conviction that we can only make this change through personal leadership. We can't do it without it. This philosophy is spreading further, including among shareholders. Eventually we will reach a tipping point, of that I am convinced.'
According to shareholders, the focus on sustainability would only be at the expense of the results. What is that like at Zeeman, what impact does the CSR strategy have on profits and margins?
'I can't give a quick answer to that, because there are several factors at play. It certainly has an impact on the numbers, but that impact is not substantial. Moreover, it also yields something. I want to get away from the idea that sustainability only costs money.
But it also costs money, doesn't it?
'93 percent of the cotton and 40 percent of the polyester we use is now more sustainable. We buy most of our cotton through Better Cotton, the polyester is recycled. Well, that is more expensive in terms of purchase than conventional cotton or polyester. And yes, the 'Zeeman bonus', with which we supplement the salaries of factory employees to a living wage, also costs money.'
'But in the meantime, we also see that absenteeism due to illness in these factories is lower and the quality of the products is higher. People enjoy going to work more. As a result, the garments are also better put together. We see a noticeable difference between a T-shirt produced for Zeeman or another label, even if they come from the same factory.'
How risky is the living wage program for Zeeman? Such an initiative can also be used against you, if it is not carried out properly and carefully.
'It is rather risky for the factories where the programmes are running. There are now ten, which together represent a quarter of our total purchase value. A side effect is that these factories, by paying higher wages than the rest, are changing the competitive landscape considerably. We started the program in 2019 and certainly in the beginning we had pilots where the factory directors were, let's put it politely, treated unfairly by competitors. Eventually, such a storm will subside. But zoom out a little further and you can see that the big problem is that so few fellow textile companies are participating.'
How do you get your colleagues to join?
'We are building a coalition of the willing. We are looking for cooperation with peers, including workwear manufacturer Schijvens and Prénatal. With Schijvens, we are running a pilot with a factory where together we account for more than 90 percent of the orders. We have also shared our approach with Hema, but the real collaboration with other brands and retailers is only at the beginning.'
'It takes a long time because we have to start from scratch in every country, no, in every region. Actually, you want all the big international brands to participate. That would make it so much easier to roll this out on a large scale. Especially because the costs are really not that bad in practice. Depending on the product, 4 to 7 cents will be added to the cost price, which is about 15 cents in the store. You notice that with a T-shirt of 3.49, but what difference do those few cents make with a designer blouse that costs 50 or 60 euros? Such a party really can't come up with the argument that paying a living wage is too expensive.'
With a 9th place, Zeeman is the highest ranked retailer on the RVO Transparency Benchmark. But being transparent also makes you vulnerable. How do you avoid being pilloried when something goes wrong, despite all your good intentions?
"I don't. In the end, you won't prevent that. What you can do, however, is to be as open and honest as possible about it. We have the working conditions in our factories independently audited. Among others by Fair Wear, they are our boots on the ground. Fair Wear also has a hotline where employees can report abuses.'
'Five years ago, we made our production sites public. We don't have our own factories, other brands also produce there, but if something happens in such a factory, it is directly linked to Zeeman. That is the disadvantage of transparency: that as an individual company you are held accountable for something that goes wrong collectively. For that reason alone, I would like every company to publish its production sites.'
Is it worth it to be so ahead of the troops?
'I think so. We take our responsibility and that includes accepting the lesser things. In addition, we act when something goes wrong. We will talk to the party in question and if the situation does not improve, we will say goodbye (as in 2021, when it turned out that there was forced labour in spinning mills with which Zeeman's suppliers did business, ed.).'
What will be the revenue model of the future for Zeeman?
'We have defined three horizons: one in the short, medium and long term. The first horizon is focused on 'small' concrete improvements, such as increasing the proportion of more sustainable materials every year. The second horizon is to adapt our current model, from linear to circular, the third is the transition to a completely new business model. 80 percent of our turnover comes from the sale of textiles, so it makes sense to start there.'
'The industry will have to. Actually, we can stop producing now: there is enough clothing on this planet to dress the next six generations. Everyone knows the images of the textile waste mountains in Ghana and Chile, doesn't that give you vicarious shame?'
How far along are you in mapping out that future?
'At the moment, we spend a lot of time on horizons one and two. By collecting discarded clothing and selling some of it back in our stores. By designing products in a smarter way, with a view to recycling, and introducing circular collections. Together with textile collector Wolkat, we have launched a line of bags and cases made of recycled felt, and social atelier Fraenck makes new items from old Zeeman deposit bags for us.'
'Compared to others, we have already come quite a long way, in absolute terms we are only at the beginning. The share of circular products in our total turnover is only a few percent, not much more. We still have a long way to go until 2050, when the economy must be fully circular.'
'As we speak, we are taking the first exploratory steps towards horizon three: a completely new business model. You could think of lease-like constructions: product subscriptions, renting items instead of buying them. But it's too early to fully commit to that right now, developments are going so fast.'
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