Though the administration at Debenhams may let out a sigh of relief, the future of England’s high street suffers another blow – as Boohoo announced that they would be purchasing the brand for £55million. Boohoo Executive Chairman Mahmud Kamani welcomes the investment, saying that it gives Boohoo the opportunity to now branch out further in homewares, sports styles and beauty. But the buy-out raises serious questions surrounding the ethics of large e-commerce brands like Boohoo, who over the past few years have not had the greatest reputation for fair workers rights and sustainable product-line practices. I decided to delve into these two brands and their pasts, to understand what this transaction could mean for other struggling high street stores going forward.
Debenhams was founded in 1778 as a store in London and expanded worldwide. At the time where it went into administration for a second time in June 2020, Debenhams owned 200 stores, all of which made a statement in the town squares and city centres they were located in. Debenhams was one of the first department stores of its kind, and is known in the British high street as a top womenswear, menswear, and beauty house. When it finally closes its doors later this year, 12,000 people will be out of a job – with no support from the new Boohoo owners on how they may integrate former staff into their own workforce. It’s disheartening news; with nearly 180,000 job losses in the UK in 2020. And that figure is expected to rise, as we weather our way through a third lockdown that has hit retail spaces badly, leaving many workers struggling to get back into the retail sector as it moves online more.
And Debenhams staff aren’t the only ones facing the loss. Following their purchase of Oasis and Warehouse in 2020, Boohoo announced that they were opening a larger distribution warehouse in England that would be finished in April 2021, and would “create 1,000 jobs”. 1,800 workers were laid off when Oasis and Warehouse was bought out by the e-commerce brand. And with the added job losses from the closure of Debenhams stores, it leaves nearly 14,000 people out of work in the middle of a recession and pandemic just from three brand closures. While Boohoo may cheer themselves on for creating new roles, it still leaves many people unsure of their job security moving forward. One of the biggest cases of backlash towards Boohoo has been because of their treatment of workers in the production line, which has already led to two previous enquiries by the British government in two years, as well as further employment offences worldwide.
On 22 December 2020, a report was released by The Guardian that exposed Boohoo paying Pakistani garment workers as little as 29p per hour. Not only that, but the safety of the buildings and working conditions were likened to those as making these workers effectively “modern day slaves”, putting their health and livelihoods at risk as they continued to work for the fashion conglomerate. Even at home workers haven’t been protected. An inquest released on 5 July 2020, found that a factory owned by Boohoo in Leicester was only paying employees £3.50 an hour – around £5 below the current minimum wage. The Boohoo director of sustainability, who remained unnamed throughout the document, was quoted saying that the concern wasn’t “directly for the well being of workers”, but because “the risk [of these findings and their implications] is so high to the Boohoo brand.” Not that they need to be that fearful of downfall.
Boohoo reported a 44% growth in the first quarter of 2020, with shares rising by 22%. They made a revenue of over £580 million last year, despite a 23% decrease in online clothing sales UK-wide, and were projected to continue a similar trend of growth in the first quarter of 2021. Yet despite the massive profits e-commerce companies have made in the past year, garment workers wages have dropped by 21% during the pandemic worldwide. In that statistic, it is women of colour who have experienced the majority of pay-cuts and layoffs in major garment-export countries, such as Romania, Bangladesh, and unsurprisingly, the United Kingdom.
Furthermore, during the pandemic (first UK lockdown and the months surrounding), large retailers overall suspended £2.4 billion in orders in Bangladesh alone, impacting nearly four million workers. Debenhams, despite a promise in their 2017 sustainability and ethics report, withheld and cancelled around £53 million worth of payment on orders from Bangladeshi suppliers, impacting 34 factories and 160,000 workers. In that same report, Debenhams worked with 65 garment factories in Bangladesh, which would mean at least half of their Bangladesh production line was disrupted in April when they first went into administration. The movement into online sales and mass production overseas for stockists in the UK, is a major problem that highlights numerous failings in the fast fashion industry, and for those working under these companies. It’s sort of baffling – are the things these companies are doing just not spread wide enough to merit public outrage, or are we so incensed to worker abuses in the global south that we simply no longer bat an eyelid? Is it not worrying that we have come to depend so much on online shopping for our own sense of self-care and normality, even if it comes at the expense of others?
Despite the country being in a full lockdown, and the need for ‘going out clothes’ decreasing, Boohoo’s marketing, along with other companies such as Pretty Little Thing, Missguided and ASOS – led to fast fashion shopping habits jumping up 46%, during the first UK lockdown in March, according to the Retail Times. Major sales, including the famous yet controversial Black Friday sales – where some clothing items were sold for as little as 8p – meant that fast fashion brands saw massive profits throughout the year. These sales are problematic for the worker rights abuses named above, but also raise questions surrounding the sustainability and responsibility of e-commerce stores; when they run through stock as quickly and carelessly as they do. A report released late December 2020 found that retailers dispose of over 25% of their customer returns; many customers online admit to buying a range of colours and sizes of cheap fashion pieces – due to how ‘easy’ it is to return those that they won’t use, but the amount of these returned items that actually end up back in the online inventory is slim. Thanks to the clothing and textiles industry, around £5 billion of waste is generated each year – and the rising size of landfills and burning piles to rid of the unwanted clothing (that are usually located in the global south) is raising carbon emissions, bringing about questions of the impact of fast fashion on the climate.
One problem with turning Debenhams into an online-only retailer, is the fact that these clothing returns are impacted. According to Rob Zomok, CEO of Inmar Intelligence, an in-store apparel return rate is about 5-8% of all in-store sales. Online retail apparel return rates sit at about 30% of all purchases. Debenhams being sold to Boohoo is also likely a major setback from Debenhams’s own sustainability goals. In their 2019 annual report, Debenhams announced that they had reduced their packaging by 22%, sourced over two-million garments made from sustainable cotton, and reduced the number of hangers sent from its stores into landfills. In comparison, Boohoo boasts ‘recyclable packaging’, with not much more to show for their efforts towards sustainable fashion and commerce practices. Boohoo transforming into an online, fast fashion monopoly poses serious risks for the erosion of worker rights, and of climate activism worldwide.
But what can be done to stop it? The fact is, high street stores are failing for a reason. Lockdown aside, visitation to stores has decreased over the past ten years according to Forbes, and the cost associated with high street stores has made it difficult to maintain them. Rent prices have risen since the start of the century, along with business rates and changes in taxation and tariff laws. There’s also arguments that rising wages and maintenance costs associated with keeping physical stores open, is a hindrance in comparison to e-commerce stores as well. While there are arguments for all sides as to why we’re witnessing the “death of the high street”, the biggest factor is that in some cases, physical stores just don’t have the capacity to compete with fast fashion retailers. Richard Lim, the CEO of Retail Economics, explains “The gap has widened between those retailers with the most sophisticated online propositions, from those with legacy store-dependant business models.” The marketing and actual items being sold by each platform is also something that heavily impacts sales. Boohoo is known for reaching out to popular celebrities and influencers, and also boasts body size inclusive advertisements that most high street stores are still slow to get in line with. Considering the takeoff of the body positivity movement online, particularly on Instagram, it is not a surprise to see a higher interest in online stores that can ensure quick shipping, larger size variety, and more accessible branding to cater to the millennial and Gen-Z consumer. Debenhams specifically did not adapt quickly enough to online shopping, and had also fallen behind the latest fashion trends over the last decade.
Fast fashion isn’t simply given that name because of how quick the wearability of the items run their course – it’s because the actual planning and making process behind the items is a three to four month production and planning line, whereas high street fashion trends are planned at a much slower – and inaccessible pace. Online influencer input also makes fashion trend planning easier; the market can be planned based on the trends of popular celebrities (i.e. those with high following) and put into production fairly easily. The monopoly on textile and garment factories by fast fashion brands means that the output of finished products (except coast and jackets) is, on average, three weeks from the designs being given the green light by the designers and head offices. The online space curated directly as a result of fast fashion trends has exploded over the past four to five years – it’s genuinely become a market to cycle through trends as quickly as we are. Mary Portas, an English retail consultant and broadcaster, worked with David Cameron’s government to lead a review into the United Kingdom’s high streets, and what can be done to save them. Her conclusion? That the high street shouldn’t be saved – it needs a complete transform. Recent surveys by McKinsey have found that people are more interested in buying sustainably. Furthermore, the more light shone on worker abuses by large retailers, is making people think twice about buying from them or stop buying from them completely. The problem arises when more avenues for brands like Boohoo, capitalise on other retail spaces. Buying Debenhams gives them the opportunity to branch out into beauty sales and homeware items. As more high street stores look at transformation, following the changes the Coronavirus pandemic has made to consumer habits, the e-commerce space is set for an even bigger expansion than past years. The hurdle we face isn’t anything to do with whether the high street or online shopping experience will win. It’s whether or not we can collectively change our mindsets – which will make a lasting difference on the fashion industry as a whole.
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