Yahoo Finance Boohoo considers closing UK factory it set up to improve workers’ treatment
The fast fashion company Boohoo is considering closing a factory that it set up in Leicester as a model for its efforts to improve the treatment of workers making its clothing.
The struggling online retailer is consulting with up to 100 workers at the site two years after it was opened to great fanfare with the intention of using it for “supplier learning and development”, creating 170 jobs.
At least some of those roles are understood to be linked to manufacturing. Staff working on quality assurance and ethical compliance that are also based there are expected to be moved to another site in Leicester, in the change, which was first reported by the trade journal Drapers.
A spokesperson for Boohoo Group, which owns the Debenhams, Pretty Little Thing, Oasis and Burton brands as well as its main label, said: “We opened Thurmaston Lane in January 2022 to support [Boohoo] in several ways, including manufacturing, printing and training.
“As in any retail business the role of our sites continues to evolve over time and following significant investments at our Sheffield distribution centre and the opening of new distribution centre in the USA, we must now take steps to continue to ensure we are a more efficient, productive and strengthened business.
“All these factors have led us to make the difficult decision to consider relocating some of the operations at Thurmaston Lane and consider the closure of the site in due course.
“We are now in a period of consultation and are working closely with all affected colleagues to ensure they are fully supported during this process.”
Operations at the factory in Thurmaston Lane were highlighted as a model by the retired judge Sir Brian Leveson in a review conducted as part of Boohoo’s Agenda for Change roadmap in 2020. The plan intended to improve conditions in the fast fashion group’s supply chain after revelations about poor pay and conditions, particularly at locations in Leicester where the group then sourced about 40% of its fashions.
However, the Thurmaston site has been the subject of controversy, after a BBC Panorama investigation last November revealed that some orders placed via the factory were actually being made by facilities in Morocco and elsewhere in Leicester.
Dominique Muller, whose report on Leicester factories in lockdown for the campaign group Labour Behind the Label prompted the concerns about Boohoo, said the potential closure of the model factory was disappointing.
“When the factory was announced it heralded such promise and the agenda for change was full of hope. But what has actually changed? UK factories are really struggling and workers are getting the worst of that.”
Boohoo’s commitment to manufacturing in the UK has also diminished. In 2022 it sourced only 25% of its products in the UK and that had fallen to 20% last year.
The potential closure of the Leicester model factory comes after a tough year for the company, with fears about imminent festive sales figures as households appear to have cut back on clothing spending over the Christmas period.
In October, Boohoo said it expected annual sales to fall by between 12% and 17%, a dive from the maximum 5% drop previously forecast, as analysts said the group had lost market share despite price cuts.
Boohoo’s sales are shrinking after a boom during the coronavirus pandemic, when stores on high streets and in shopping centres were forced to close for many months. Sales fell 17% to £729m in the six months to 31 August, forcing the company £11m further into the red than a year before – to a loss of £26.4m.
