Blog: Michelle RussellLeicester garment industry dominates headlines

Michelle Russell | 13 July 2020

UK fast fashion retailer Boohoo Group has dominated the headlines in the last week after media reports surfaced of exploitation and unsafe conditions at one of its Leicester-based supplier factories, which is reportedly paying staff just GBP3.50 (US$4.38) an hour.

Boohoo has insisted it works to ensure everyone in its supply chain is "properly remunerated, fairly treated and safe at work" and warned it will axe relationships with factories that breach its supplier code of conduct.

A number of major online fashion retailers, including Next and Asos, have dropped Boohoo's brands from their websites over the claims, and analysts have questioned where the retailer goes from here and how it will affect fashion's transparency problem.

The online retailer has now launched an independent review of its UK supply chain, led by Alison Levitt QC, and has committed to investing an incremental GBP10m (US$12.5m) to eradicate supply chain malpractice. The review will focus on supplier compliance with minimum wage regulations, compliance with Covid-19 regulations, working hours and record-keeping, and right to work documentation and contracts of employment.

The global apparel factory auditing process has been impacted on numerous fronts by the coronavirus pandemic – from travel bans limiting on-site access, to a possible surge in violations as factories reopen. It could also give way to innovation in self-inspection methods.

The Prime Minister of Bangladesh, Sheikh Hasina, has said the Covid-19 pandemic has had a "devastating impact" on the country's readymade garment (RMG) sector and expressed concern over the growing level of job losses on the economy.

Meanwhile, the US Department of Homeland Security (DHS) says it will take increased enforcement action against US firms that continue to trade or conduct business in Xinjiang, China. An advisory warns US businesses, individuals, academic institutions, service providers, investors and others that choose to operate in Xinjiang or engage with entities that use labour or goods from Xinjiang will face reputational, economic, and legal risks associated with certain types of involvement with entities that engage in human rights abuses.

China's apparel and footwear exporters have been hit the hardest by coronavirus-led demand shocks, a new report has found, with the two sectors having shown no signs of recovery. Exports of apparel, as well as upstream textile materials, have recovered only slightly from the coronavirus effect, still down by 20%-30% in the first five months of 2020, according to Finch Ratings' China Corporate Snapshot – June 2020.

The Dutch Agreement on Sustainable Garments and Textiles (AGT) has been criticised after an investigation found member affiliates failing to adequately address specific problems around human rights risks in the factories they work with.

To drive further circularity in the global denim industry, companies must look beyond financial growth and learn to create value in different ways – with stakeholders collaborating to help shift the sector's mindset.

Technology is at the heart of the apparel and textile industry's emergence from post-Covid lockdown, with digitalisation now key to helping brands navigate the fragile system the pandemic has exposed.

As disheartened members of this supply chain, and as optimistic consumers, we commit to being part of the 20% – the minority demanding and developing, launching, and implementing new and sustainable innovations and standards up and down the supply chain.

And a raft of more apparel retailers have been forced to file for bankruptcy protection as the pandemic continues to weigh on business. Lucky Brand and G-Star Raw are the latest to fall victim to its financial pressures. Meanwhile, Levi Strauss & Co has outlined plans to slash 700 of its corporate workforce in a move expected to generate US$100m in annualised savings.

In other news, Pentland Brands is to make around 350 jobs cuts as it hibernates the Boxfresh brand; the BGMEA has opened a 50-bed Covid-19 field hospital in Chattogram; and the US and Kenya have formally launched trade agreement negotiations.

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