One year after Alison Levitt QC’s report into the wake of the Leicester supplier scandal that engulfed Boohoo, Retail Week visits some of the factories involved to understand the impact of the revelations and the changes made as a result.

  • Retail Week reviews three Leicester factories to see whether Boohoo’s Agenda for Change has been put into action
  • Boohoo director of responsible sourcing Andrew Reaney calls on fellow retailers to join together to overhaul Leicester supply chains and become more sustainable
  • Leicester factory owners seek to improve the textile industry’s reputation and bring retailers back to UK sourcing

Boohoo Leicester factory 9

Source: Charlie Millington

Last July, the fashion industry was shocked by reports of underpaid workers in Leicester’s garment industry, who were also labouring in unsafe conditions and without the protection expected amid a global pandemic.

Boohoo found itself at the centre of a media storm when Leicester’s dirty “open secret” came to light as some of the retailer’s suppliers were accused of modern slavery – paying as little as £3.50 per hour.

Since then, Boohoo – which also owns BoohooMan, PrettyLittleThing, Nasty Gal, MissPap, Karen Millen, Coast, Oasis, Warehouse, Debenhams, Dorothy Perkins, Burton and Wallis, as well as the eponymous womenswear brand – has been on a mission not only to turn around its own approach, but to overhaul the garment industry in Leicester to ensure it never happens again.

Boohoo Leicester factory 2

Source: Charlie Millington

Trade Fabrics produces fabrics for multiple brands, including BoohooMan

In September last year, the fast-fashion giant published Levitt’s report, an in-depth analysis of the supply chain concerns that had flourished in Leicester, and created an Agenda for Change.

The agenda includes the publication of a global supply chain list, the creation of an electronic supply chain audit system and retraining buyers to understand the cost of creating a garment.

Boohoo has also axed 100 suppliers from its list who did not meet its standards and has attached top-team bonuses to meeting sustainability and ethics targets.

One year on, Retail Week was invited by Boohoo, as part of the Meet the Makers event designed to open its doors to customer and media scrutiny, to visit three of the retailer’s Leicester-based suppliers to find out how their businesses had been impacted by the scandal and how Boohoo’s remedial plans have been put into action.

A family business

Many Leicester factories have been family-operated for decades, passed on to the next generation and bringing in a new set of skilled workers every few years.

One such business is Mine and Yours, run by brother and sister Pardeep Kareer and Sim Heera, who took over from their parents in 2018. It has an exclusive contract to supply Boohoo brands as a CMT (cut, make and trim) unit.

“Our family has been in the fabric industry since our grandfather came to England from India,” explains Heera.

Boohoo Leicester factory  11

Source: Charlie Millington

Mine and Yours has an exclusive contract to supply Boohoo brands

“He started in a factory as a worker, bought his own factory and then our parents joined the business. We’re following on from them. We’ve always been based in Leicester.”

Mine and Yours creates simple garments for Boohoo such as dresses, tops and bodysuits, with the most complicated elements being details such as ruching.

The Levitt report suggested that Boohoo should place “a ‘mixed bag’ of orders with each supplier”, meaning that more complicated items that cost more to produce are interspersed with simple garments so that profit margins are more balanced and suppliers can afford to keep their workers paid well.

PrettyLittleThing creates around 1,000 new styles per week – some of which will be produced by Mine and Yours – and has a roughly 60% hit rate, which means 600 of those will be reordered in a bigger run.

The first run, PrettyLittleThing buying manager Gemma Dunne says, will be roughly 300 units, but the aim is to make each garment in at least two different colours or patterns.

The second order – if the item flies off the virtual shelves – will then be for 1,000 units, dependent on supplier capacity, which is an important step on the Agenda for Change.

Levitt also recommended that Boohoo open up a dialogue with suppliers to ensure they have a regular flow of orders and can plan their workforce needs, without committing to too much.

Because of its UK location, Leicester is the perfect place for Boohoo’s signature test-and-repeat model – in which short runs of garments are trialled to check their popularity before placing larger orders – and the buying team works in conjunction with Mine and Yours’ in-house designers to plan out their collections.

While the scandal caught out suppliers who were not operating legally, Mine and Yours pays a minimum wage of £8.91 to all employees across two production sites. It also offers holiday pay, sick leave and training programmes for those who do not arrive with the necessary skills.

As Boohoo looks to overhaul its working practices, it has also taken the opportunity to introduce more sustainable fabrics into its supply chain, which Kareer says costs around 50p to 70p more per unit, dependent on fabric consumption.

 “It was a well-known secret and when it was exposed it was a good thing. For all those people that were being underpaid, they’ve now got proper wages”

Sim Heera, Mine and Yours

The factory currently uses around 85% sustainable cotton and recycled polyester as opposed to virgin fabrics, and has just launched a new scatter cushion filled with shredded offcuts of the fabric used to make Boohoo’s garments, indicating a new commitment to bettering the business across categories.

Heera and Kareer see themselves as the “next generation” of Leicester manufacturers, with “fresh eyes and fresh faces” to bring the business into the next decade and focus on what is important to the garment industry now.

While some Leicester suppliers have seen their orders slide after the scandal last year, with some retailers now avoiding the city, the pair view the revelations in a positive light.

“We’ve always prided ourselves on being fully ethical,” says Heera. “It was a well-known secret that it was happening in Leicester and when it was exposed, for us, it was a good thing. 

“For all those people that were being underpaid, they’ve now got gainful employment, being paid proper wages. 

“We’ve got a lot of staff that have come from the places that were paying less than minimum wage – no holiday pay, sick pay or anything like that. 

“A lot of people have come to us asking for jobs, so knowing that we can give them that security and pay them ethically is a nice feeling.”

A collaborative effort

The Levitt report recommends that Boohoo implements an electronic supply chain audit system whereby buyers can ensure factories are not overloaded with orders. This would also incentivise better working practices, including sustainable and ethical approaches, with bonuses and sanctions – both of which require open conversation across each level of manufacturing.

Retail Week’s next visit was to Trade Fabrics, a manufacturer owned by the uncle of Mine and Yours directors Kareer and Heera.

Boohoo Leicester factory 8

Source: Charlie Millington

Trade is Boohoo’s nominated sustainable fabric manufacturer 

The factory produces fabrics for retailers including Boohoo, Asos, River Island and Primark, using both recycled and non-recycled materials.

Trade Fabrics has sought to become more sustainable over the past year, as well as contracting engineers to operate the machinery; each is contracted for 40 or 45 hours a week and paid between £9 and £11.

While Trade does not work directly with Boohoo, it is the retailer’s nominated sustainable fabric manufacturer, using 50% to 60% recycled yarns.

“The process is that the buying and merchandising teams will reach out to the suppliers and say which trends/designs are popular that week – for example, spots, stripes or animal prints – and then give them a brief on the type of product, such as casual bottoms or going-out dresses,” explains Boohoo group head of sourcing Sophie Rycroft.

“The supplier will come to Trade, whose design team will work on the fabric designs and send over samples.”

As Trade works with various retailers, each will be keen to keep their competitive edge and use different fabrics to their peers.

If a Boohoo buyer designs the fabric, it owns the trademark, whereas Trade can, in theory, sell one pattern to multiple retailers. However, more often than not, it creates a similar but different version instead.

The fact that multiple retailers work with Trade shows that there is still some element of interest in sourcing in Leicester, but it is no longer the “hub” it used to be, the factory said.

While Boohoo is determined to keep its supply chain in Leicester, the factories have experienced a drop in orders since the scandal hit and are crying out for retailers to return to their doors and bolster their finances.

Boohoo senior ethical compliance manager Ben Geary explains that retailers are now coming together to rebuild Leicester’s fortunes.

“I now have bi-weekly meetings with the other retailers who work in Leicester and we’re sharing information to keep business here and sort things out”

Ben Geary, Boohoo

“There are various meetings that involve different stakeholders, including law enforcement, the British Retail Consortium, retailers and the Ethical Trading Initiative, where we’ve come together to work out issues,” he says.

“What it really meant was that a lot of brands walked away, whereas Boohoo has stayed to sort things out. 

“I now have bi-weekly meetings with the other retailers who work in Leicester – In The Style, Yours, Quiz, I Saw It First, Missguided, Asos – and we’re sharing information to keep business here and sort things out.”

Boohoo head of responsible sourcing Andrew Reaney takes this collaborative approach one step further when it comes to the fashion industry at large and its response to sustainability issues.

“The reality is that the majority of our factories are shared with other retailers and that’s where collaborations are good because you come as a collective voice to the suppliers,” he says.

“Every retailer has the same challenges – we’re all trying to become more sustainable. It’s better to be collaborative because we’ll all get there together quicker and it’s better for the consumer.”

Investing in UK manufacturing

Boohoo Leicester factory 5

Source: Charlie Millington

5th Avenue leans into Leicester’s unique ability to create shorter runs of products

The final visit of the day was to 5th Avenue, founded in 2014 by second-generation textiles producer Sajid Esa, whom Geary refers to as a “diamond in the rough” that needed Boohoo’s investment to bring the business to the next level. This falls in line with Levitt’s suggestion that Boohoo use suppliers who can produce on a large scale.

“My parents came to Leicester in the 1970s because they knew that the industry for textiles was thriving here and that’s where their expertise lies,” Esa told Retail Week.

“While we came from humble beginnings, the expertise that they had meant they could start their own factory, employing five people, which then grew to a team of 60. 

“Unfortunately, back in the early 2000s, they had to close the factory down. They were producing around 30,000 units a week, but retailers started moving production to places like Morocco and Turkey, and my parents found it very difficult to compete on price.

“With the amount of negative press that Leicester has had, the impact it’s had on thousands of manufacturers has devastated the industry”  

Sajid Esa, 5th Avenue

“They went through a few tough years and I lived through that period. It grew a hunger in my belly, to say the least.”

Esa has since been looking for ways to do something different in the textile industry in Leicester and bring it back to being the capital of fashion manufacturing it once was.

5th Avenue, therefore, leans into Leicester’s unique ability to create shorter runs of products.

“We can’t beat China, Bangladesh or Pakistan; we have to be Leicester and focus on what we do best,” he adds.

Esa has instead formed relationships with manufacturers abroad to import ready-made goods of high quality while investing in machinery for his T-shirt screen-printing business. 

The businesses share working practices so they can make improvements together – something Boohoo aims to play on for its model factory, opening in November on Thurmaston Lane, Leicester.

The model factory will produce more complicated items for the Boohoo group, acting as a training centre for its current suppliers so that more business can be brought back to the area.

“In the last two years, with the amount of negative press that Leicester has had, the impact it’s had on thousands of manufacturers has devastated the industry,” Esa summarises.

“There’s a number of retailers who walked out of Leicester and there’s a number who are not looking to tarnish their reputation by sourcing here in future either, just because of the perception now in the public eye and the media. 

“There’s no country that can compete with us in terms of speed, for example, but the focus has been on the negatives, not the positives.”

Boohoo Leicester factory 7

Source: Charlie Millington

Boohoo invited Retail Week to its 5th Avenue factory as part of the Meet the Makers event

Boohoo’s commitment to opening up its doors to both the public and media scrutiny, publishing its supply chain lists and overhauling its working practices shows a willingness to make real changes in the UK textiles industry.

While the fashion giant is not the only one who sources in Leicester – and certainly not the only one that may have been aware of the “open secret” – it has now stepped up to the plate and is taking responsibility for its oversight.

The visit to the Boohoo factories was organised by Boohoo itself – a fact that must be borne in mind when considering the changes made in Leicester. However, the open dialogue between factories and buying and sourcing teams is a great step in the right direction.

GlobalData Retail senior analyst Emily Salter agrees that Boohoo has made good progress.

“One year on from implementing its Agenda for Change, it appears that the Boohoo group has made significant progress in improving its supply chain as it was forced to make more changes in a year than many brands would achieve in numerous years,” she says.

She particularly cites the £150m bonus scheme, which links its top managers to improvements in conditions in its supply chain.

“This scheme provides a strong motivation to continue to create positive change and is a good step forward in how bonus schemes can be used to improve ESG (environmental, social and governance standards), but also indicates that the agenda is aimed primarily at regaining the confidence of investors,” she adds.

While Boohoo indicated its commitments to introducing sustainable materials and practices into its supply chain, Salter ultimately wonders whether the continuation of Boohoo’s operating model – “dropping hundreds of new products daily at very low cost” – could lead to questions from consumers about whether true sustainability can really be achieved. 

In keeping with this, Levitt’s report sets the longer-term challenge for Boohoo to ingrain sustainability in its business practices, in order “to be the first choice for the fashionable and thrifty young person with a social conscience”, provide education for both its buying teams and garment workers – which will be covered by its new model factory – and ultimately bring the workers into the Boohoo family.

To quote Andrew Reaney: “It’s been an interesting journey, and it’s definitely been a journey.” For Boohoo and Leicester, it’s certainly not over yet.

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