Boohoo to Shut Down UK Distribution Center

More Boohoo Group jobs are on the line.

The e-tail juggernaut confirmed Monday that it plans to axe its Daventry distribution center in the village of Crick in England’s Northamptonshire, placing an estimated 400 positions on the block.

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“For the past three years, our Daventry distribution center has played an important role in Boohoo Group’s U.K. operation,” a spokesperson said. “We would like to thank our colleagues for their hard work during this time. As our business and customer needs evolve, the group has taken the difficult but necessary decision to close our Daventry operation and divert investment to other U.K. sites in order to better serve our customers around the world.”

The PrettyLittleThing and Nasty Gal owner opened the unit, which formerly housed operations for Arcadia Group, following its purchase of Debenhams and the Arcadia Group brands Burton, Dorothy Perkins and Wallis in 2021. In the years since, it has shuttered a distribution center in nearby Wellingborough, poured 150 million pounds ($191 million) into retrofitting its Sheffield site and opened a warehouse in Pennsylvania to dispatch U.S. orders. Besides Sheffield and Pennsylvania, Boohoo has another unit in Burnley in Lancashire.

The news comes as Boohoo is considering calling time on its “center of excellence” in Leicester, a 30-minute drive north of Crick on the M1 motorway. A desire to streamline operations was also cited as a reason for the Thurmaston Lane factory’s closure, which will impact 100 jobs.

​​“We opened Thurmaston Lane in January 2022 to support the group in several ways, including manufacturing, printing and training,” a spokesperson said previously. “As in any retail business, the role of our sites continues to evolve over time and following significant investments at our Sheffield distribution center and the opening of new distribution center in the U.S.A., we must now take steps to continue to ensure we are a more efficient, productive and strengthened business.”

Neil Saunders, managing director of retail at GlobalData, an analytics firm, characterized this rush to reorganize as “largely a consequence of incredibly poor trading.” An October earnings update, for instance, predicted as much as a 17 percent drop in full-year sales due to inflationary pressures, higher shipping and energy costs, plus unseasonably warm weather in Europe that killed the mood for spending.

​​But its portfolio may also lack zip. Though Boohoo took over the Daventry distribution center to help boost capacity after its acquisition spree, “unfortunately, those brands continue to suffer from the dull images they had prior to their acquisitions, and Boohoo’s attempts to revitalize them have largely failed,” Saunders said. “The group is now looking to rationalize costs in this area of the business off the back of weak sales.”

Same thing with the Thurmaston Lane factory, which was opened in “better times for Boohoo” but is ultimately proving too costly for a business that is trying to go toe to toe with even more affordable players like Shein.

“Ultimately, all of this points to a company that is trying to maneuver itself out of trouble,” he added.

The Barbie collaborator said that it’s supporting affected colleagues by organizing a career fair. So far, 12 organizations are attending, the spokesperson said.

But Kaenat Issufo, community engagement lead at Labour Behind the Label, a workers’ advocacy group from Bristol, said the company should be helping workers find employment, not putting together an event that “that may lead to workers being neglected once again.”

“Once again we are seeing workers being used when demand is there but are left to suffer in the name of investment and business needs, how many more years will this exploitation continue?” she asked.

Much like the suppliers that precipitated a “sweatshop” scandal a few years ago, resulting in a so-called Agenda for Change program that birthed the Thurmaston Lane facility, Boohoo’s distribution centers have faced accusations of poor labor practices.

Last April, some 200 employees at the Daventry warehouse filed a collective grievance with the help of the union Unite to protest “unconscionable” new shift demands that left workers only one weekend off every five weeks.

“To ensure the long-term strength of our operations, we are proposing to amend shift patterns at our Daventry warehouse,” a Boohoo spokesperson said at the time. “We are conducting a consultation on the proposed change, throughout which employees’ views are aired and considered in the appropriate forum. As a business, we do not formally recognize a union, but our employees are free to join a union individually.”

Unite’s complaint came on the heels of a Times report that alleged “grueling targets, inadequate training and ill-fitting safety equipment” at Boohoo’s warehouse in Burnley, where employees said they were forced to walk the equivalent of a half-marathon per shift amid steaming temperatures of nearly 90 degrees Fahrenheit. Pakistani workers, an undercover reporter said, were told by a white marshal to work in the hottest parts of the warehouse while their white co-workers were sent to cooler areas.

While Boohoo questioned if the “picture painted is reflective of the working environment at our Burnley warehouse,” it also said that making sure its employees are safe and comfortable was its “highest priority.”

“We have been operating our Burnley warehouse for 12 years and are extremely proud of the work that we do there, the amazing team we have on-site and the important part our business plays in giving back to the local community,” the representative said.