Sir Philip Green’s retail empire Arcadia Group has thrown its weight behind the return of manufacturing from overseas to the UK.
Arcadia’s department store chain Bhs last week directed one of its suppliers of women’s thermals to enter discussions with a manufacturer in Leicester to see if it could undercut the cost of an existing deal with a factory in Ludhiana, India.
By working with the UK manufacturer, the supplier, which declined to be named or to comment, calculated it could shave an average of 50p off the cost price per unit. The reduction equated to a saving of about £30,000 on an order of 65,000 units, even before the costs of freight and supervision in India, or the potential for delays in the full-to-capacity supply chain are factored in.
Last month, Drapers highlighted the soaring costs of cotton and labour in countries like India and China, and freight in general, as well as the unreliability of overseas production. These have combined to make UK manufacturing economically competitive for mid-market retailers and brands for the first time in about 20 years.
In the case of the supplier of Bhs thermals, a lack of suitable circular knitting machines in India has exacerbated the issue.
Bhs is the first major high street name known to have taken steps to boost its UK manufacturing base, which is thought to currently supply about 5% of all of parent company Arcadia Group’s product. Arcadia declined to comment on whether it was taking similar steps for all its fascias, but it would be surprising if Bhs was its first target for the treatment, as speed-to-market is more of a focus for its trend-led, young fashion fascias, which include Topshop and Miss Selfridge.
This week, N Brown-owned home-shopping giant JD Williams prepared to host an open day for UK suppliers in Leicester on Friday, to boost its own UK manufacturing base.