Fast Fashion: Commons Committee Questions Business Model

By Jerri-Lynn Scofield, who has worked as a securities lawyer and a derivatives trader. She is currently writing a book about textile artisans.

’Tis  high time for an update on the fast fashion beat.

Last week, the House of Commons  Environmental Audit Committee grilled fast fashion retailer Primark on its business model (see my previous post for background, Fast Fashion: Recycling No Panacea, reporting on the committee’s launch of an inquiry into the social and environmental costs of fast fashion).

The committee also questioned Burberry, for its decision to burn nearly £30 million worth of product– clothing, accessories, and perfume – in 2017 to protect the exclusivity of its brand (see Waste Watch: Burberry Pledges to Stop Burning Unsold Goods), and representatives from Boohoo, Misguided, Asos, and Marks & Spencer also provided evidence.

The fashion industry wastes considerable resources, and its standard operating procedure exacerbates climate change, as the Guardian has reported in MPs criticise high street fashion’s throwaway culture. Fashion, many are surprised to learn, is the second dirtiest industry on the planet.

According to the BBC, in Fast fashion: ‘How do you justify selling a £2 T-shirt?’:

Labour MP Mary Creagh, chair of the committee, asked Primark’s head of ethical trade and environmental sustainability, Paul Lister: “How can you justify selling T-shirts in your stores for as little as £2 or £3, and how can you be making a profit on those?”

He replied: “Primark has never done any significant advertising at all, and that can save us in any year £100m to £150m, compared to some of our larger rivals. That goes straight into price. That keeps our pricing low.”

“It’s our business model that takes us to a £2 T-shirt.”

Now, I understand many Britons live in poverty – and for them, a $2 T-shirt is a blessing.

But, many if not most of those who purchase those cheap T-shirts are not driven by economic necessity. I was surprised to see that Britons buy more new clothes than any other country in Europe, according to the Guardian. I confess I’m not sure how the causal chain works here – are Britons more fashion conscious, or is the fast fashion industry better developed there than elsewhere?

Allow me a personal aside. I was indoctrinated into the typical American middle class mindset that one didn’t wear the same clothes day after day. I well remember when I showed up in Geneva, in late summer 1986, to take up a one-year research fellowship at l’Institut universitaire de hautes etudes internationales, to continue research on business interests and trade policy, and noticed those around me espoused an entirely different way of thinking about clothing. People would buy clothes that were of the moment – the height of fashion – but would only purchase only a small set of items – clothes for 3 or 4 days- and would wear them, day in, day out, for several months or indeed much of the year – until they purchased an entirely new set of up-to-the minute items.

Now, to be sure, this model also produced excess waste.  Still, just three or four sets of clothes, worn for much of the year, and then replaced – is a far cry from the current rampant fast fashion model, where clothes are worn no more than a handful of times and then discarded.

Fashion’s Labor Abuses Not Confined to Developing Countries

The Commons committee also delved into fashion’s labor practices. Please note that these abuses are not confined to labor employed in developing countries. Over to the Guardian:

Online retailers Asos, Boohoo and Missguided were questioned about the health checks carried out on the large number of Leicester factories they worked with.An investigation by Channel 4’s Dispatches alleged last year UK factories supplying retailers such as River Island, New Look, Boohoo and Missguided were paying workers between £3 and £3.50 an hour. A Financial Times investigation (£) also found examples of exploitation in Leicester factories.

Creagh questioned how it was physically possible for Manchester-based Boohoo to sell UK-made dresses for £5 when the hourly minimum wage was £7.83.

The company’s joint chief executive Carol Kane said the company did not make any profit on the £5 dresses, which were “loss leaders” designed to attract shoppers to its website. The typically short dresses, made out of polyester and elastane, featured no zips or buttons, so were easy for machinists to run up, she said.

“We do not make a profit on a £5 dress,” said Kane, adding that the cost price of the garments was even less at £2.50 to £3. “It’s a loss leader. It’s a marketing tool designed to drive visitors to the website.”

Waste to Protect the Brand

Fashion’s waste problem isn’t limited to fast fashion. The Commons committee also questioned Burberry’s decision to burn unsold product in 2017- a practice that is apparently widespread in the luxury fashion segment. Over to the BBC again:

Earlier this year, [Burberry] was strongly criticised for burning £30m ($40m) of stock. It admitted destroying the unsold clothes, accessories and perfume instead of selling them off cheaply, in order to protect the brand’s exclusivity and value.

Leanne Wood, Burberry’s chief of corporate affairs, told MPs the firm was “committed” to stopping the activity, but added: “It is an industry practice. We’re the only luxury business that’s reported it in their accounts… but it is something that happens in the industry.”

Charities Overwhelmed: Enough!

The surfeit of fast fashion items is overwhelming UK charity shops. As The Telegraph reports, Fast fashion means charity shops are getting too many clothes, head of select committee says:

Because of over-consumption of clothing, 235m garments were sent to landfill last year, according to submissions sent to the committee.

Recycling charity Textile Reuse & International Development (Traid), found that only a fraction of clothes earmarked for charity shops and recycling were acceptable for re-distribution.

Traid submitted evidence that showed 650,000 tonnes of clothing were collected for reuse and recycling in 2014, but a survey two years later by the Sustainable Clothing Action Plan found just 39pc was donated to charity shops.

This problem is also, by the way, an international concern – the dumping of used clothing  is undercutting  domestic textile production, so much so that some countries are saying, enough – they don’t want to import any more used textiles, as I discussed in The High Hidden Costs of Fast Fashion.

The Bottom Line

Christmas approaches, and I am currently purchasing holiday gifts.

I’ve long just said no to fast fashion – although that pledge is  easier for me to make than it may be for others, as my research has introduced me to producers of exquisite textiles. Most artisans who make them lack an international presence. I’m fortunate  to know  these people, and to be able to buy their wonderful products.

Still, allow me to suggest, as one buys gifts for friends and family – perhaps one thing to consider is the environmental impact of these purchases.

 

 

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8 comments

  1. Glen

    I’m going to have to root around the house, find anything Burberry, and donate it to charity. Get a list of the rest of the brands burning surplus and I’ll donate all that $hit too. Definitely not buying any of it.

    Reply
  2. TimH

    I am curious whether the Burberry £30m ($40m) burn was valued at cost or MRSP, and whether cost or MRSP is used for net profit deduction.

    This reminds me of when drug companies shipped ex use-by-date product to disaster areas, for deduction purposes.

    Reply
    1. John Zelnicker

      @TimH
      December 2, 2018 at 3:25 pm
      ——-

      In the US, the tax deduction would be limited to actual cost of production of the garments. Same for the pharmaceuticals.

      Reply
  3. ambrit

    When I worked at the ‘Chicken Palace,’ surplus goods retail shop, about a third of the sales floor was clothing. That clothing was usually last year’s fashions from national retailers like WalMart, Sears, J C Penneys, and the like. What continually amazed me were the MSRPs on those items. Who, I would ask myself, could afford many of these items at these prices? Yet the customers, mainly poor and working class, would flock to the “new” stock. That “new” stock was, by design, priced close to the original MSRP, but disguised to appear discounted. Savvy shoppers would joke with the workers about when the items would eventually drop into genuine discount territory. Sadly, the items would usually sell before any real discount had taken effect. In essence, the deplorable shoppers were paying full retail for seconds and unsold items. The culture is out of balance.
    The prices in the mainstream thrift stores are exploding. Poor people have to notice things like that, and adjust purchasing decisions accordingly. The gap between the wealthy and the ‘rest of us’ has always been there. The gap between the remnants of the middle class and the poor is widening.
    So, I am forced to ask; who is buying all this overpriced clothing?
    Under the old cultural norms, with an emphasis on functionality and budget, vast closets full of clothing were anomalies. Now, the opposite seems to be the new norm. High time to begin returning to older norms.
    In full disclosure, I have too many clothes in my own closet. I have learned by painful experience not to question the contents of Phyllis’ closet.
    Sorry for the rant.

    Reply
  4. Lunker Walleye

    My husband and I live in a 840 square foot home built in 1940 and we have lived here for 32 years. It has four small closets, tiny by today’s measure. It was designed for a time when people did not have extensive wardrobes. William Morris said, “If you want a golden rule that will fit everything, this is it: Have nothing in your houses that you do not know to be useful or believe to be beautiful”. Consumers need to be educated about textiles to make better choices. Perhaps that’s my pipe dream for a cold evening.

    Reply
    1. 4Corners

      What a nice sentiment.
      I also like Eames’ banana leaf:

      “There’s sort of a parable I’d like to . . . In India . . . I guess it’s a parable: In India, sort of the lowest, the poorest, the, those, those without and the lowest in caste, eat very often–particularly in southern India–they eat off of a banana leaf. And those a little bit up the scale, eat off of a sort of a un . . . a low-fired ceramic dish.

      And a little bit higher, why, they have a glaze on–a thing they call a “tali”–they use a banana leaf and then the ceramic as atali upon which they put all the food. And there get to be some fairly elegant glazed talis, but it graduates to–if you’re up the scale a little bit more–why, a brass tali, and a bell-bronze tali is absolutely marvelous, it has a sort of a ring to it.

      And then things get to be a little questionable. There are things like silver-plated talis and there are solid silver talis and I suppose some nut has had a goldtali that he’s eaten off of, but I’ve never seen one.

      But you can go beyond that and the guys that have not only means, but a certain amount of knowledge and understanding, go the next step and they eat off of a banana leaf.”

      Thank you for the reporting, Jerri-Lynn.

      Reply
  5. Carla

    I have a couple of close friends who purchase clothing, household goods and gifts ONLY from “nearly new” shops. They are setting a great example, and last year I actually got my great nephew a used book for Christmas — he loved it !

    Reply
  6. Sparkling

    It is unbelievable that the idea to recycle old fashion and therefore old clothing is constantly dismissed as reactionary nostalgia and has even been blamed for the election of Donald Trump. Or perhaps not, considering who and what “high culture” really stands for.

    Reply

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