Good write up of lack of retail backing vs allegations3 Aug 2020 16:43
https://www.drapersonline.com/news/retailer-support-vital-to-tackle-leicester-manufacturing
Nutshell:-
Boohoo Group has borne the brunt of the allegations around its Leicester supply chain: roughly £2bn was initially wiped off its £5bn market capitalisation last month. It has launched an independent review of its Leicester supply chain, led by barrister Alison Levitt. It will investigate whether the allegations are well founded and will consider the extent to which the group had knowledge of them. The report, including recommendations for the future, is due to be published on 15 September.
Boohoo Group has also revealed plans to set up its own “model” factory in Leicester as a joint venture with a UK clothing manufacturer.
Drapers understands that the factory will be located at a 2.5 acre site on Thurmaston Lane in the city, where Boohoo has run a small office since the start of the year.
The group said it anticipated the factory would employ up to 250 people with a capacity to produce about 50,000 items a week.
A spokeswoman told Drapers: “Plans for the site are still in development and we will work with the local officials and the local community to create something that shines a light on manufacturing excellence in Leicester.”
Experts were positive about the idea but questioned how far reaching it would be in solving issues in Boohoo’s supply chain.
“It’s absolutely the right thing to do from a corporate point of view because it gives physical proof of the standards they are working to,” said one fashion retail supply chain director. “The executive board will be under huge pressure from external investors.
“The biggest question for me is: how do they make sure the model factory is repeatable and scalable across all of their supply chain; will factories of all sizes and scale be able to follow the same standards?”
Another supply chain expert agreed: “It’s a great idea if they produce a model factory that is completely compliant – it has got to be positive. That is what they’ve got to do to prove to everyone that they are doing the right thing.”
He added: “We [as an industry] have to put our arms around and say how do we make it all work? It’s not just retailers that have got to do this. It’s also HMRC, payroll, Leicester, the police, the fire brigade, the mayor and his office. We are very good at naming and shaming people, but the answer is collectively putting it right.”
Sign In
Follow the stocks
