RE: Times today21 Feb 2021 11:17
Part 2
Covid-19 has provided opportunities too. Mick Cheema, owner of Basic Premier, one of Leicester’s legitimate factories, said many bosses were claiming furlough payments for staff while making them work as usual behind blacked-out windows. Dominique Muller, policy director at campaign group Labour Behind the Label, said furloughed staff had been given sewing machines to use at home.
Leicester’s mayor, Sir Peter Soulsby, estimates that the city’s clothes industry once employed about 10,000 workers in 700 factories, but hundreds of these have been shut by the pandemic.
Cheema believes Boohoo’s ban on subcontracting and the collapse of Sir Philip Green’s Arcadia Group, which also sourced from Leicester, means many businesses will never reopen.
Boohoo co-founders Mahmud Kamani and Carol Kane have deep ties with Leicester’s garment industry, having worked closely with factory owners during their time running the wholesaler Pinstripe Clothing in the 1990s. But it is chief executive John Lyttle, formerly of Primark, who is tasked with tackling the crisis.
QC Alison Levitt’s report on Boohoo’s failings estimated the company used 200 Leicester suppliers directly and a further 300 indirectly — though sources suggest that subcontracting means the real number is much higher. Sourcing director Andrew Reaney last year culled 64 factories that failed to adhere to a new code of conduct. Lyttle, meanwhile, has been courting new suppliers in Dubai.
Boohoo, which declined to comment for this article, insists it remains committed to Leicester and will issue bigger orders to a smaller number of trusted suppliers. The company is opening its own factory in Leicester to try to demonstrate that it is possible to work legitimately and profitably — though it is difficult to see how they can sell T-shirts for £3 while generating a return for themselves and suppliers.
Kamani has been focusing on acquisitions that reduce Boohoo’s dependence on the city that powered its growth. Brands such as Karen Millen, Oasis and Dorothy Perkins sell higher-priced clothes to an older demographic, while the £55 million purchase of Debenhams’ online business provides a foothold in the higher-margin beauty sector. Lockdowns that drove shoppers online have helped: in the ten months to December 31, sales rose 42 per cent to £1.5 billion.
While retailers insist they want to source more from Leicester, the city faces a tall order re-establishing itself. About a fifth of production costs are made up by labour. In fast-fashion hub Turkey, the minimum wage is £290 a month — less than 20 per cent of the UK cost.
Leicester’s factories hold a crucial advantage, though. Sourcing from the Midlands can shave two weeks off lead times, allowing them to justify a higher cost price for catwalk knock-offs.
For years, Boohoo enjoyed those benefits while Leicester’s garment workers paid the price. Now, Leicester needs Boohoo to start picking up the tab.
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