Lands' End has not authorized any production in North Korea and is investigating if any products of the Sears Holdings Corp unit were made without its knowledge in the country, its chief executive told Reuters on Thursday.
U.S. companies are barred from trading with North Korea. Violations, including the outsourcing of any element of clothing production to the country, are punishable by up to a $1 million fine or 20 years in prison.
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"We will take action if warranted, depending on what the investigation finds," Lands' End CEO and President Edgar Huber said.
His response came after NK News reported on Thursday that at least five dress shirts branded with Lands' End labels - but displaying "Made in China" tags - were seen on a rack at North Korea's Sonbong Textile Factory in June.
Lands' End said "it is too early to say" whether it is a case of counterfeiting or a supplier outsourcing manufacturing into another country, spokeswoman Michele Casper said.
Huber said it has reached out to all its suppliers and its head of sourcing was in Hong Kong to further investigate the issue. China is a key sourcing base for the company.
"We are completely committed to global compliance," Huber said, adding that early reports from suppliers did not show any violation.
The report comes at a time when retailers on both sides of the Atlantic are being urged to boost their checks of their supply chains after recent incidents in manufacturing hubs like Bangladesh pointed to unsafe working conditions.
(Reporting by Dhanya Skariachan; Editing by Richard Chang, Bernard Orr)