The British fashion retailer Boohoo has been repeatedly confronted with allegations for years that its success is based on the massive exploitation of workers. The interesting thing about it: This army of workers does not live in distant Asian production countries, but in the middle of Great Britain, more precisely in Leicester. Scientists at the University of Bath conducted a study to investigate how this could happen and what impact the scandals had on people and the region.
Nearshoring instead of the Far East
Boohoo’s recipe for success has long been unique because, in contrast to the fashion industry’s general practice, it was based on nearshoring. Instead of moving the supply chain to distant countries, the company built supply relationships in the heart of England and was able to implement and market the latest trends faster than anyone else. At the same time it revitalized Leicester’s clothing industry. The system worked. About 70 to 80 percent of Leicester’s approximately 1,000 factories began producing for Boohoo, the study found.
Bad working conditions
But the real cost of this system was borne by the workers, mostly immigrants with poor English skills, who were fobbed off with wages of three pounds an hour. The poor working conditions in many of these factories became widely known in 2010. Investigative journalists infiltrated one of the factories and reported on the working conditions. Wages were below the legal minimum wage, breaks were denied, and hygiene left a lot to be desired.
Scandal: modern slavery
The conditions in the factories in Leicester became internationally known in the wake of the pandemic. Shortly after the outbreak of the COVID-19 pandemic, the Sunday Times revealed that workers were not only receiving unfair wages but were also being forced to work without adequate health and safety precautions. These revelations became a public scandal. Boohoo wanted to be prepared for the rapidly increasing demand for loungewear in online retail. Many factories followed suit, resulting in work shifts of up to 12 hours with only a few short breaks.
Factories are closing
The media reports about “modern slavery” in the middle of England triggered an avalanche. Boohoo’s share price plummeted and authorities became aware of the conditions and the first factories were closed. Other companies also withdrew from Leicester for fear of being caught up in the scandal themselves. In the end, Boohoo also divested itself of many factories; according to the study, the number shrank to 68 factories.
The entire study was created based on extensive field research carried out from April to July 2023 and is dedicated to the current situation in Leicester from the perspective of workers, factories, authorities and brands. Vivek Soundararajan led the study. The report can be downloaded from the Embed Dignity research initiative website.