Boohoo Seeks Buyer for Leicester ‘Center of Excellence’

Boohoo Group’s model factory is no more.

The e-tail giant confirmed to Sourcing Journal that its barely two-year-old manufacturing facility in the English city of Leicester ceased operations at the end of January. The 23,000-square-foot space on Thurmaston Lane, which CEO John Lyttle once hailed as a “visible demonstration of our commitment to Leicester and U.K. garment manufacturing” is now on the auction block. Fewer than 100 employees, many of them involved in end-to-end garment manufacturing, such as cutting, sewing and digital printing, have been either reassigned or laid off, a spokesperson said.

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The PrettyLittleThing and Nasty Gal owner had previously chalked a potential closure to the “evolving” role of its sites, “significant” investments at its Sheffield distribution center and the debut of a new warehouse in the United States, adding that it “must now take steps to continue to ensure we are a more efficient, productive and strengthened business.” It was also in January that it announced that it would be shuttering its Daventry distribution center in the Northamptonshire village of Crick, where some 400 people were employed.

Lyttle had called Thurmaston Lane, which opened in early 2022 to great fanfare, “more than just a factory” but rather a “hub of learning and collaboration” that would “bring back skills that have been lost over time.” It would also serve as a living, visible rebuke of reports of excessively long hours, treacherous conditions and illegally low wages that have long plagued Boohoo’s U.K. supply chain, not least because an independent report known as the Levitt review deemed them “substantially true” following allegations of Covid-19 rule-breaking in 2020.

The spokesperson said that the facility’s wind-up had nothing to do with a November BBC Panorama investigation alleging that staff were caught pressuring suppliers to lower prices by as much as 10 percent, even after deals had been finalized. Nor was it related to a second BBC Panorama bombshell, this time in January, that found that Boohoo stitched “Made in the U.K.” labels on potentially thousands of Pakistan-made items that were then shipped to Thurmaston Lane.

But University of Bath researchers, who published a report on the aftermath of Boohoo’s “sweatshop scandal” in February, said that the developments show that the company has made “superficial business changes” that only resulted in the loss of livelihoods and fewer employment choices than before. Boohoo’s response to the “sweatshop scandal,” including its so-called “Agenda for Change” program, failed the workers it should have protected, they said.

Business has dimmed to a pinpoint for Leicester’s manufacturers in the wake of the much-publicized imbroglio. Coupled with a cost-of-living crisis that has diverted any remaining business to cheaper “near-shore” destinations such as Turkey and Morocco, the number of factories in the East Midlands hub has collapsed from 1,000 to barely 200.

Boohoo refutes this, saying that it donated 1.1 million pounds ($1.4 million) to kick-start the creation of the Garment and Textile Workers Trust, whose guidance, advocacy and remediation work it continues to support.

“It is widely acknowledged that there have been significant improvements in standards across the Leicester garment manufacturing industry in recent years,” the spokesperson said. “We’re proud of the role our Agenda for Change program has played in driving the industry forward and we continue to work constructively with our suppliers to make sure the people who make our clothes have their rights in the workplace protected.”

Even so, the factory at Thurmaston Lane was among the reasons that Brian Leveson, the retired High Court judge who oversaw the program’s rollout, declared Boohoo ready for “business as usual” in his final letter to the company’s board in February 2022. He said that its ethical compliance team used the site as a base of operations from which the Debenhams parent “exercises responsibility for daily sourcing and compliance checks. The facility also served as a “template” for open costings with the “primary goal of focussing on enhanced production efficiency to ensure that suppliers remain competitive and retain a reasonable profit.”

“Running through the Levitt review is the observation that Boohoo had failed to appreciate that running a great company required social responsibility as well as growth,” Leveson said. “That message has been heard, understood and is in the course of being remedied, with very substantial steps already taken to recognize the wider picture beyond commercial success.”

But perhaps not, said Dominique Muller, policy director at the Bristol-based workers’ advocacy group Labour Behind the Label. While the facility’s shuttering marks a sad end for Leicester’s workers, she told Sourcing Journal, it also comes “after years of Boohoo pushing down prices and standards in the city.”

“Its closure can be seen as a sign that ethical production and ultra-fast, throwaway fashion don’t mix and, importantly, as a sign that in the future workers and suppliers can focus on working with brands willing to commit to raising prices, standards and orders for Leicester’s skilled fashion workers,” Muller said.