“The ethical process isn’t as difficult as people think.”

That’s what Sharon Wauchob, creative director of Edun insisted in the November 2010 issue of American Vogue. But Edun, Bono and Ali Hewson’s clothing brand which aims to promote trade in Africa, brought Wauchob on board last year because the company was going through a very difficult period indeed.

Edun belongs to a rapidly growing market sector known as “sustainable luxury.” The term, which first emerged in 2004, essentially refers to luxury brands that produce high-end ready-to-wear and couture clothing using ethical and fair trade practices from start to finish.

Sustainable luxury is a tall order: Companies must remain transparent about their production processes and the environmental and social impacts they have, while still maintaining the quality and desirability that consumers and buyers expect within the luxury sector. Then there’s the whole issue of growing a business, which is where the Hewsons ran into some challenges.

Pride (In the Name of Love)

Edun’s story is emblematic of the inherent challenges of sustainable luxury. A for-profit, ready-to-wear line with A-list celebrity backers, Edun got noticed immediately when it hit the market in 2005. Barneys and Saks Fifth Avenue even agreed to share an “exclusive” to sell the brand’s first collection.

At the time, the brand’s story was simple: All the clothes were produced in Africa. Sustainable luxury looked easy, and cool.

But Edun quickly ran into problems with sourcing and shipments from Africa continually ran late. In September 2010, The Wall Street Journal reported that Edun was being carried in just 67 stores, down from hundreds in 2006.

Ron Frasch, president and chief merchandising officer at Saks (who dropped the line several seasons ago) told the Journal that “Sustainability of the product doesn’t have any value unless the fashion is correct.” In other words, Edun was failing at the “luxury” part of sustainable luxury.

LVMH "Core Values" campaign via seasonfive.typepad.com

Mysterious Ways

In 2009, Bono and Ali Hewson sold a 49 percent stake in Edun to luxury brand conglomerate LVMH for $7.8-million. Days before the debut of Wauchob’s first collection in September 2010, it was reported that only 15 percent of the line was produced in Africa, with the other 85 percent manufactured in Asia and Peru.

The Edun camp quickly began to reframe its story. Rather than produce the line in Africa, it now said it promoted economic and sustainable initiatives on the continent.

Retailers, buyers and everyday consumers became wary of Edun’s lofty claims, and while its most recent spring 2011 and fall 2011 collections were lauded in the press for their extreme wearability, people still weren’t convinced of Edun’s so-called good intentions.

LVMH fought back with a slick “Core Values” marketing campaign in 2010. A dedicated website, Louis Vitton Journeys, presents a multimedia narrative of the land, the people and the communities that Edun supports.

In an audio segment, Ali Hewson explains that “Edun aims to raise awareness of the possibilities in Africa and encourage the fashion community to do business there.” She stresses that Edun offers “business, not charity,” and that “the more successful Edun is the more we can support people in the areas we work.”

With or Without You

And it’s clear that Hewson means business. She recently told The Toronto Star that Edun is “trying to be very thoughtful about everything we do, but we are also trying to become a big, global fashion brand. Chinese production helps make that happen, but the principle remains the same.”

The question is whether the Hewsons can have it both ways. In other words, can luxury, sustainability and big business really go hand in hand?

Classic luxury brands like Hermès and Christian Louboutin keep production small regardless of demand and encouraged sustainable practices before the term “sustainable luxury” came about. (The majority of production takes place in France and Italy).

Both of these brands are still family-owned and have resisted million-dollar buyouts by fashion conglomerates like LVMH and Gucci Group. They’ve remained exclusive by playing it relatively small.

Even Better Than the Real Thing

A handful of sustainable luxury brands have popped up in the last few years that seem to understand the delicate relationship between supply and demand. Collections are small and produced in limited quantities in order to maintain the exclusivity – and sustainability – of their brands.

Since 2007, supermodel Liya Kebede has employed traditional weavers in her native country of Ethiopia to create a collection of handmade women’s and children’s dresses, skirts and accessories known as LemLem.

Similarly, film director Max Osterweis teamed with designer Erin Beatty to launch Suno, which produces 70 percent of its line in Kenya, all beading and embroidery work in India, and the rest in New York.

Like Edun, Osterweis and Beatty are finding doing business in Africa a challenge. Frequent electrical outages grind production to a halt, while cell phone and Internet service is unreliable at best. Meanwhile, the fashion industry continues knocking on their door for orders.

However, Beatty says Suno is determined to keep things small. The brand’s goal is to develop local economies by nurturing talent within each region they set up shop in. The team travels to Kenya and India several times a year to help cultivate new skills.

“There is no reason that you can’t feel good about what you do,” said Beatty in the March 2011 issue of American Vogue. “It might be a little harder, but ultimately it’s more gratifying.”

With this new crop of luxury designers keeping it small, the Hewson’s vision of creating a global fashion brand feels somewhat at odds with what sustainable luxury has become. Today’s designers are going beyond questioning their own company’s environmental and social impacts; they’re beginning to challenge the sustainability of big fashion itself.