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Approach to Sourcing and Human Rights

At ��������Ƶ. (“��������Ƶ”), which includes ��������Ƶ Dress for Less and dd’s DISCOUNTS, ethical business practices are at the core of our culture and can be seen every day in the way we treat all of our constituents, from customers and associates to vendors and investors. This focus on ethical business practices is also reflected in ��������Ƶ’ policy that we will not knowingly purchase merchandise from any manufacturer involved in the use of child, slave, prison or forced labor.

��������Ƶ is an off-price retailer with 1,561 stores in 37 states, the District of Columbia, and Guam as of April 29, 2017. The majority of the apparel, footwear, accessories and home-related merchandise sold in our stores is purchased from suppliers after they have been produced and imported to other retailers’ specifications.

Though ��������Ƶ does not have direct control over the manufacturing processes for these products, we require suppliers to uphold our ethical standards, both contractually and through enforcement.

While ��������Ƶ orders and imports some products directly through its international buying agents and from manufacturers, they represent the minority of merchandise sold in our stores. For these items, we have additional requirements in place to monitor compliance.

��������Ƶ’ standards and requirements related to sourcing and human rights are incorporated in various Company documents, including ��������Ƶ’ Code of Business Conduct and Ethics, Vendor Compliance Manual, Purchase Orders, Vendor Indemnification Agreements, and Buying Agent Agreements. Our Code of Business Conduct and Ethics is located under Corporate Governance in the Investors section of , and our Vendor Compliance Manual can be found at .

��������Ƶ communicates its standards and requirements to vendors, buyers and international buying agents during our purchasing processes.

��������Ƶ’ Sourcing and Human Rights Standards

Vendors, manufacturers and other business partners of the Company are required to comply with all applicable federal, state, local and international laws relating to the manufacture and production of products sold to ��������Ƶ, including compliance with all applicable laws relating to:

• labor compensation;
• working conditions;
• child, slave, prison or forced labor;
• environmental protection;
• product safety;
• corruption or bribery (including foreign corrupt practices);
• building and working condition safety; and
• similar obligations.

��������Ƶ will not knowingly purchase any product whose manufacture involved the use of any child, slave, prison or forced labor; any labor where workers are not provided wages or safe working environments as required by law. Additionally, we will not knowingly purchase products made in violation of established environmental or consumer product safety requirements.

To the extent contractors or subcontractors are involved in the production of goods supplied to ��������Ƶ, vendors must ensure that these parties adhere to all applicable laws and regulations.

Training and Enforcement of ��������Ƶ’ Standards

��������Ƶ provides initial training for new buying associates as well as ongoing training and updates to buyers and other associates involved in our product sourcing. Further, ��������Ƶ’ Legal and Transportation departments monitor and assess our supply chain for compliance related to product safety, labor laws and human trafficking laws.

For products sold in our stores for which ��������Ƶ is the direct importer:

• ��������Ƶ trains and instructs overseas buying agents, shippers, product testing lab resources and impacted ��������Ƶ associates on Company standards and on policies and protocols relating to import products.
• ��������Ƶ requires buying agents to conduct initial in-person walk-throughs and subsequent full inspections of vendor factories. ��������Ƶ regularly reviews and audits buying agent inspection reports to verify that they are complete, comprehensive and up to date.
• ��������Ƶ engages third-party auditors to conduct social compliance audits on certain vendor factories.
• ��������Ƶ Legal team members observe and monitor select buying agent inspections and third-party audits of vendor factories.
• ��������Ƶ tracks vendors’ corrective actions addressing any issues identified in buying agent inspections or third-party audits.
• ��������Ƶ requires its international buying agents to request and review available third-party factory audit reports of direct import suppliers and to report and disclose any issues contained in those reports to ��������Ƶ compliance personnel in the Legal department.

If ��������Ƶ becomes aware that any vendor has been found to be out of compliance with ��������Ƶ’ requirements or procedures regarding the above, including any applicable local, national or international labor or human trafficking laws, ��������Ƶ will take appropriate responsive action, which could include suspending all shipments of a vendor’s merchandise and terminating the business relationship.