Cotton On fined $1 million over unsafe kids’ clothes: And four more of the company’s biggest controversies

Cotton On is in trouble with the authorities yet again, with the retailer now fined a massive $1 million for selling children’s sleepwear that was deemed so flammable it shouldn’t have even been supplied.

But this is just the latest incident involving the company and regulatory authorities, with Cotton On having been at the centre of a number of controversies over the past few years including advertising bungles and even an underpayment scandal.

The move also comes just as the business is beginning to really hit its stride, recently announcing an expansion of its Geelong headquarters and 500 extra jobs.

In a judgment handed down by the Federal Court, Justice Tracey said the company supplied nightwear between September and December 2010 that was so flammable it shouldn’t have even been sold in Australia.

Australian Competition and Consumer Commission deputy chair Delia Richard added the incident was magnified by the fact the nightwear was labelled “low fire danger”.

Justice Tracey said the serious nature of the consequences weighed in favour of a large penalty, noting the target consumers were particularly vulnerable. Tracey also said the responsibility for compliance was with the senior managers, who “manifestly failed to comply with this important aspect of their duties”.

Cotton On was contacted by SmartCompany this morning, but no reply was available before publication.

This isn’t the first time children’s wear has fallen within the sights of the consumer watchdog. More recently, discount chain Dimmey’s was fined for selling unsafe material.

This is a massive fine for Cotton On, which is known for its controversial marketing and edgy advertising. To Cotton On’s credit, the ACCC said the company voluntarily recalled the products and co-operated with the authorities throughout the investigation.

But that still doesn’t mean the company is entirely smear-free. Here’s a list of all of Cotton On’s run-ins with controversy and the law over the past few years. There’s certainly been a few:

1. Porn products

At the start of this year, the company earned scorn from activist groups after selling porn-themed products during its back to school sale. One of the key products was an iPhone cover with the image of a naked woman on it with the word “dirty”, while a mug was being sold with the words “porn is my saviour”.

A thousand people signed a petition against the products.

2. Social media backlash

Cotton On is no stranger to social media backlash. Way back in 2009, the business encountered online scorn after it sold products with phrases such as “they shake me” on baby clothing.

Cotton On Kids even said it was “unaware” the clothing would be found offensive. Marketing experts found it a little hard to swallow at the time, considering how much the business loves the spotlight.

3. Underpaying staff

In 2010, Cotton On ran into trouble with the Fair Work Ombudsman, which ordered it to back-pay 3,000 workers.

The amount wasn’t much, only an average of $84 per employee, and it was associated with training sessions. Interestingly, it was one of the first Fair Work cases where a company was ordered to produce an apology online.

4. Lambskin boots

The children’s wear incident isn’t the first time Cotton On and the ACCC have butted heads. In 2008, the business admitted that having a “lambskin” label on its boots may have actually misled consumers into thinking the boots were made of lambskin.

Who’d have thought.

There wasn’t a fine involved, but it did agree to a series of undertakings including correction notices, full refunds to buyers and the implementation of a trade practices compliance program.



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