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We are building a Boohoo factory in Leicester to end the storm over wages, boss says

Boohoo boss John Lyttle insists he doesn’t embark on a personal crusade – but it can go that way whether he likes it or not.

Tomorrow, the director of the online fashion company will visit Leicester amid a storm of negative publicity over allegations that workers in the company’s supply chain in Midlands were underpaid.

There, Lyttle will visit the site of a new project that he hopes will be a very visible sign that the company wants to make a change after it was forced to pull two suppliers off the roster earlier this month.

Radical: John Lyttle wants Boohoo to make his own clothes

Radical: John Lyttle wants Boohoo to make his own clothes

In a radical plan, Lyttle wants to build a ‘model factory’ in Leicester. It is part of a strategy that he believes could pursue the success of the Spanish fashion giant of £ 26 billion and Zara owner Inditex, who makes his own clothes so that he can replenish inventory in his stores faster.

“Some of the stories are disturbing,” Lyttle says of the headlines in recent weeks. ‘Cause if there’s something wrong in Leicester I’d rather find and fix it, not run to the hills and say,’ That’s it, we’re out of here – let someone else figure it out. ”

Since this month it was claimed that a supplier was paying employees just £ 3.50 an hour, £ 1.7 billion of Boohoo’s stock market value has been wiped out. The company said it found no evidence that any of its suppliers had paid that amount, but confirmed that its code of conduct had been violated.

In the furore that followed, Secretary of the Interior Priti Patel ordered the National Crime Agency to investigate factory conditions in Leicester. This week, Boohoo is also expected to provide details of its plans for a large independent study led by Alison Levitt QC.

An experienced retailer, Lyttle was hired by Primark 16 months ago to gain a professional grip on Boohoo’s ever-sprawling business empire, founded by the Kamanis – a family whose personal lives are as colorful as the clothes it sells.

If something is wrong, we will fix it

Lyttle wants Boohoo to start producing its own clothing with a local joint venture partner as early as September. The ambition – almost unheard of in the modern retail industry in this country – is to hire as many as 250 production workers on site or to open a temporary factory nearby if it cannot be prepared quickly enough.

Speaking to The Mail on Sunday via a video link from his headquarters in Manchester, Boohoo’s boss explains: “Number one: this factory is committed to British production. But it’s also about making sure we can support our growth with a level of in-house production. ‘

Lyttle also wants to demonstrate to the doubters that it is possible to make clothing ‘in a certain way’ in the UK – that is, without making turns or taking risks that lead to harmful heads. The strategy would double compared to the UK production model and Leicester dependence.

Lyttle explains, “Inditex has a number of joint ventures in Spain and Portugal that they work with that really enhance their flexibility – that’s no different.

“Let’s get this working, prove the model. And then decide and see where we’re going. We are not manufacturers, but we are confident that we can do this and make this factory successful. ‘

Model Behavior: John Lyttle hopes Boohoo's plans will help mimic the success of Zara owner Inditex

Model Behavior: John Lyttle hopes Boohoo's plans will help mimic the success of Zara owner Inditex

Model Behavior: John Lyttle hopes Boohoo’s plans will help mimic the success of Zara owner Inditex

Other factory partnerships are likely to follow – possibly even elsewhere in the country where the dying embers of Britain’s old rag trade are fading. Lyttle says Boohoo even considered buying warehouses for its supply manufacturers to protect them from fixed costs such as rental charges.

He says Leicester factories – “by far the most expensive” of all the factories in the world he buys from – can replenish orders for just a few hundred items in just two days. That gives Boohoo the edge over rivals who import clothing from China. The six-week shipping trip can leave clothes ‘out of fashion’ even before they come ashore, Lyttle explains.

We want to be a real global player

In the past two weeks, he has also ordered factories that supply Boohoo to ensure that employees have details of a confidential whistleblower hotline – something that, according to campaign group Labor Behind the Label, was an essential step recently to address Leicester’s alleged shortcomings.

Lyttle says much of this, including the launch of an independent factory auditor Verisio to run samples, was planned before the recent bad publicity. But efforts have clearly received a new impetus.

Boohoo sources 40 percent of its clothing from British factories, mainly in Leicester, where it dominates the city’s trade, despite having a small office of just ten people.

Such dependence on British sewing machines would be alien to large chain stores, most of whom moved production to Asian suppliers decades ago. It had been speculated that Boohoo might prepare to follow his rivals who would get more of his clothing from the Far East.

But Lyttle says, “I think we can get over this. I mean, remember, this is the UK. This is not a country on the other side of the world. This is a city in the UK. ‘

Boohoo was one of the few beneficiaries of the corona virus pandemic.

Shift: Boohoo sources 40 percent of clothing from UK sites - much in Leicester

Shift: Boohoo sources 40 percent of clothing from UK sites - much in Leicester

Shift: Boohoo sources 40 percent of clothing from UK sites – much in Leicester

But it is impossible to give the impression that the demands on Leicester’s factories, allegedly under lockdown restrictions, have culminated the problems in the city’s fashion industry.

Leicester’s garment factories operate from hundreds of inconspicuous warehouses and sometimes semi-dilapidated industrial sites. Visit one and the owners will bring anecdotes of malpractice to their rivals.

There are many stories of illegal circumstances, tax evasion and ‘phoenix’ companies forced to close and reopen under a new company name in a few weeks. People who are really determined have countless ways to stay one step ahead of the authorities – with CCTV front doors and exits at the back of the factory so they can quickly remove packed factory floors.

But there is another side to the story: one of the factories with tightness and money struggling from one week to the next. Limited and sporadic orders that leave businesses with word of mouth while waiting for the next order of the latest favorite fashion, which is always the easiest to make in Leicester. More complicated designs are almost all made abroad.

Lyttle says that Boohoo – whose nine brands also include Nasty Gal and PrettyLittleThing, as well as former high street brands Karen Millen, Coast and Oasis – works with ‘150 operations’ around the city, often switching between them. But its top 40 suppliers make up 80 percent of production.

Boohoo husband John Lyttle, 53

Lives: With his family in Sevenoaks, Kent; travels by train to Manchester to work through the week.

Hobbies: Avid runner.

Usually wears: An H&M T-shirt and a pair of Paul Smith jeans. “I’m not a Gucci fan, but I don’t wear a BoohooMan either, because that would be very bad for a teenager to see me wear that.”

On the legendary £ 5 dresses from Boohoo: Lyttle says campaigners often burden his company with making a dress at a price that’s “too good to be true” with hidden costs of cheap labor. He says, ‘The £ 5 dress … you know what we’re doing? We call three of our big boys [factories] and ask them to pack all the pieces of fabric they have left – enough for a hundred dresses of that color and 50 dresses of that. Put it together, give me a price. For this promotion, we are going to make a very simple dress, easy to manufacture, and then we will consider the margin. It is simply a marketing tool. You would think it was 50 percent of our sales. It would be less than one percent. Our average price is double digits. ‘

Lyttle has worked for some of Britain’s most famous rag tycoons: Sir Philip Green and Matalan John Hargreaves, no strangers to headlines themselves. He was in Primark during the nightmarish collapse of the Rana Plaza factory in Bangladesh.

He says larger factories with more consistent orders and healthier finances are key for the future – at least for his own suppliers. It also helps some companies to plan production schedules ‘four, five months’, which would be essential ‘to ensure continuous growth, as that clearly means more demand and guaranteed jobs.’

Last year, Boohoo also launched what it describes as a world-class “14-day” pledge to facilitate cash flow, compared to 60 or 90 days at many other retailers. “I’m trying to get ahead. This was a way to really help these companies and not let them take risks. ‘

But has the spotlight of the past few weeks been dented? Lyttle shakes his head. “We guided the market. So if we thought we were changing we should update but we don’t. ‘

Clearly, it has also not affected the group’s ambitions. Lyttle, wearing Paul Smith jeans and a H&M T-shirt, describes herself as ‘Irish – a straight and whatever.’

He says, “I am not the person who chooses the product. But I clearly understand retail. But still, you know, I understand technology, I understand logistics, supply chain, and how to put it all together to make it work.

He calls the worldwide success of Inditex and H&M as’ where we want to be, but online.

“Maybe we started in the British market. But what we actually want to be is really a global player. ‘

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