Just Style’s investigation of UK public records has found that 28 Leicester textile companies went insolvent in 2022, while 11 have filed for insolvency to date in 2023. The records show insolvent companies in late 2022 included named suppliers of Boohoo.
Sajjad Khan of the Apparel and Textiles Manufacturers Federation said last year that, of approximately 500 textile businesses still trading in Leicester in 2020, only an estimated 180 were still trading in 2022.
Meanwhile, GlobalData’s filings database shows that mentions of “Leicester” in apparel company filings steeply dropped off in 2022 and 2023, falling from 95 mentions in 2021 to 69 mentions in 2022 to just 11 mentions this year. This coincides with the increasing prominence of Pakistan in apparel company filings, as loss-making fast fashion giants turn their attention to South Asia in the name of cost-cutting.
Fast fashion giants eye Pakistan in bid to slash costs
Leicester’s historic textile industry has taken a battering in recent months, as retailers have demanded price discounts, made last-minute cancellations and imposed financial penalties on their suppliers.
This comes as fast fashion firms like Boohoo (owner of PrettyLittleThing, Nasty Gal and MissPap) and ASOS post staggering losses and diminishing revenues: ASOS incurred losses of £290.9bn ($351.3bn) for the six-month period ending 28 February, while Boohoo’s operating losses increased by 80% year-on-year to £21.2m for the six months ending 31 August. The latter recently warned that full-year sales could fall as much as 17% this year, saying that it has identified £125m in potential cost savings.
Boohoo, which published a list of its 80 UK suppliers in 2021 in the name of transparency, has in recent years focused its efforts on extending its supply chain beyond the UK.
In September, Chairman of Boohoo Group Mahmud Kamani reportedly expressed an interest in establishing “long-term buying linkages with Pakistan”, while the country’s caretaker Prime Minister Anwaar-ul-Haq Kakar conveyed his commitment to facilitating investment and the building of manufacturing facilities within the country, according to Radio Pakistan.
Now, textile manufacturers in Leicester fear an exodus of retailers towards Pakistan, where garment workers have allegedly been paid as little as 29p an hour in “appalling conditions”. At the beginning of the month, hundreds of garment workers, trade unions and labour rights advocates took to the streets in Leicester, calling on fashion brands to commit to sustainable jobs in the city.
Just Style reached out to Leicester garment manufacturers that had previously been named as suppliers of Boohoo, but they did not immediately respond to a request for comment.
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