LEICESTER – A UK apparel retailer is raking in a seven figure sum annually by charging clothng garment manufacturers for late delivery, claims a prominent businessman and garment manufacturer in Leicester, England. In documents seen by Apparel Insider, it can be seen that one retailer is charging £250 for deliveries which are more than 30 minutes late – or early – and up to £500 for some delays.
In a damning exposé which lays bare the (surely untenable) unequal balance of power between fashion retailers and their supply chains, the businessman also claims:
• He has more than 70,000 metres of fabrics – worth £200k – sat idle in his factory after retailers placed but later cancelled orders
• Retailers regularly find reasons to return garments which they refuse to pay for – and sometimes even charge manufacturers to return items
• Many retailers take up to 90 days to pay bills, after which they pressure manufacturers to give a 5 per cent discount
• Retailers are charging as much as £500 for late delivery
Talking to Apparel Insider in the wake of the UK Government’s current high profile enquiry into the UK fast fashion industry, Saeed Khilji, chairman of the Textile Manufacturer Association of Leicester, suggested that continued downward pressure on fashion garments meant the whole supply was been squeezed – with manufacturers in the textile hub of Leicester being forced to cut corners to remain afloat.
Khilji suggested the situation is mirrored in other global garment hubs such as Bangladesh, Vietnam and India, and there is certainly compelling evidence to back up such sentiment. Indeed, the new wave of online, ultra-fast fashion brands seems to have placed even further downward pressure on fashion garment prices. Dresses for £10 or less are no longer uncommon.
“If we don‘‘t do anything the Leicester garment industry will close down in 3-4 years,“ he told us. I have met with the Ethical Trading Initiative on many occasions and they are aware of the situation, they have yet to come back to us yet with any solutions.”
Earlier this year, the Financial Times ran a major report on the current situation in Leicester, suggesting many manufacturers are paying garment workers well below the National Minimum Wage as this was the only way to remain competitive in the market.
Asked if anything has changed since then, Khilji said: “It has changed a little. Many manufacturers are now paying good wages but, again, the problem is they will no survive long as the price of end garments continues to go down every day. That is why retailers cannot afford to pay good prices to manufacturers – and if manufacturers are not getting a good price, how can they afford to pay good wages?”
More to follow on this story, and the UK Government’s fashion enquiry, in the coming days.