Interview

In conversation with: Dee Poon

Dee Poon is the Managing Director of Brands and Distribution at Esquel Group, a leading Hong Kong-based textile and apparel manufacturer.

She is a member of the Family Advisory Council for the Ownership Project at Oxford Saïd, which studies how family firms, representing up to 80 percent of all businesses worldwide, influence the sectors and communities in which they operate.

Poon is also the daughter of Harvey Nichols owner Dickson Poon and Marjorie Yang, chair of Esquel Group.

She recently spoke to Oxford Saïd Senior Research Fellow Dr. Mary Johnstone-Louis about modernising a heritage company, Esquel’s response to the Covid crisis, sustainability and the advice she would give to family business owners. Here is an edited version of their conversation:

Dee Poon

Mary Johnstone-Louis: You’re living a unique chapter right now in which Esquel pivoted from making shirts for high-end brands to manufacturing face masks in light of the Covid-19 pandemic. Can you give a sense of the scale of the operation and the brands you typically work with?

DP: Esquel is a vertically integrated textile and apparel manufacturer. We do cottonseed research and we collect cotton, mainly from small farmers in Xinjiang. We also buy American, Indian and Australian cotton, and we gin it, spin it, we make the fabric and we make the clothes. In a normal year [we make] … about 100 million shirts. That number is going to be lower this year.

We've worked with a lot of different companies and brands that you've probably heard of, ranging from Ralph Lauren to Muji and Hugo Boss. It’s a very broad cross-section, focusing more on the mid-market and the mid-upper market.

MJL: In March 2020, we had a virtual meeting of the Ownership Project’s Family Advisory Council. At that point, many business leaders were trying to make sense of the pandemic and were grappling with how to respond. On that call, you explained that you had already switched production to make, at that early stage, around 30 million reusable masks. You sent some to Oxford, ensuring that every student in our incoming MBA cohort had reusable masks. Looking back to earlier this year, how did you make that switch happen so quickly?

DP: Covid-19 hit Hong Kong and China about a month or two before it hit the West in any real way. In Hong Kong, there were hardly any masks – you could buy them but the price was exorbitant.

My mother got a call from one of her friends saying, ‘Marjorie, you know how to make things. Can you please make masks?’ And the first thing she thought was, 'What are you talking about? You're crazy.'

We spent 48 hours as owners thinking about it and the implications of what it would mean for us to make a medical mask, and whether mask supply would be an ongoing concern. We decided if we were going to make a mask, it had to be reusable.

However, there were no standards for reusable masks. Luckily, we knew a lot of people in the medical community who were very willing to help and within about 14 days the first masks came off the [production] line. We donated most of them, including to public sector workers across Asia who had to keep working during the early months of the pandemic. 

As Covid-19 spread to the West, orders for our retail products started to fall. But people wanted to buy masks, and we were able to produce them. It's still shocking to me that as of October 2020 we have prevented over 1.2 billion masks from ending up in landfill. That number is horrifying. Environment and sustainability are core to our corporate culture, and we obviously had that in mind.

MJL: As family owners, this ties to ambitions that you've had for your industry long before Covid-19. What are your personal goals around the changes you want to make to the fashion industry and to retail?

DP: When you think about textiles and apparel, you think about pollution and sweatshops. Basically, the purpose of Esquel’s entire existence is to counter that view.

We have something called the ‘eCulture’ defined with 5E's. First is Ethics, how we treat people, second is Environment, and then it is Exploration, Excellence, and Education. Had we not done all of these things, we would have never been able to make a mask. What it shows is that good leadership, foresight, and having a purpose really make a difference and allowed us to act with speed and agility.

MJL: What are you seeing on the customer side around sustainability and the changing demands being made of the fashion industry today?

DP: I don’t think the customer is all that demanding in terms of sustainability. There's a lot of ability to greenwash, and a lot of marketers do that. They will pick up something sustainable, or that is recognised by the market as sustainable, and sell against that point.

But honestly, the problems are deep and long-standing and not that simple to solve. We've been measuring our water and our carbon footprint for 15 years now. Are we perfect? No. Is there always more to be done? Yes. People want a perfect solution but it just doesn't exist. And so then how do we go through these issues to decide what is good enough? It's very difficult.

There are definitely brands that want to have those very deep discussions, and others that don't. And I think what's interesting is to understand, at a systems level, where the drive for change comes from for change to happen. Is it from consumers? Is it from government? Is it from non-profits and NGOs? Is it from manufacturers who can just come up with a solution and then push it out into the market? It’s very complicated.

MJL: Esquel is a family business and relatively rare in the sense that it is female-owned. What does responsible ownership mean to you, as a family?

DP: It’s about people, and the environment, which we define as our broader community. We have a new manufacturing site, called Integral, in Guilin [China] which we restored as we built the factory there. What was amazing to us was the return of birds to the site - we had re-established a link in the migratory chain. It's those things you don't necessarily expect, or you didn't know, but how can you not care? If you care about people, this is where they spend a large chunk of their day. You take care of your people, so they will take care of you.

MJL: What would you tell another owner or another family who says, we want to live our values, but we're in an incredibly competitive industry that's ultimately focused on price?

DP: If you look at a P&L, everybody is squeezing down to the last percentage point. It doesn't matter what you do. That being said, I think the question you have to ask yourself is, ‘Can you sleep at night’? If you say you have these values, and you really want to live by them, did you do that today? If you really gave it a best-effort approach, and if you built a team around you who also have those same beliefs, then that’s the best you could do.

MJL: Given the economic uncertainty we’re facing, is there one piece of advice you’d give to Next Gens who want to build a sustainable and responsible business?

DP: The best piece of advice that anybody has given to me is that it's not a sprint, it's a marathon. In times like these, every day can feel like a new body blow, especially when you're younger. It's very hard to see past the here-and-now when there so much happening. I've certainly never seen anything like Covid-19. You want to try to solve the whole problem at once, but it's just not going to happen like that. Try to stay grounded, stay well, and healthy, keep a mindset that's not too dramatic and focus on your goal. If you've got the right structure, you’ve put the proper defences in place, then you'll have the staying power to get through this extraordinary chapter.