Manufacturing is coming home: British fashion boss champions ‘reshoring’ | manufacturing sector
On a hot summer’s day in Derbyshire, Christopher Nieper worries about bringing fabric from Shanghai to his factory in the former mining town of Alfreton.
In the spring and early summer, he had a container full of fabric stranded in the port of Shanghai for three months while the Chinese city was in lockdown due to Covid. Not wanting to wait any longer, he ended up paying an extra €5,000 (£4,200) to have it air-freighted, first to France and then on to the East Midlands.
“I’ve had customers ordering in March and saying, ‘Where’s my dress? I’ll have to cancel it.’”
Now the owner of David Nieper, the family business named after his father that has been making women’s clothing, knitwear and lingerie in the city since 1961, is sourcing his essential materials locally.
“You can make a week out of three months,” he says. “Think about the environment, save the energy it takes to get something that far around the world. Think about time savings, about waste avoidance, about customer satisfaction.”
In response to the severe disruption caused by the Covid-19 lockdown in China and Russia’s invasion of Ukraine, more than a third of UK manufacturers have increased the number of their suppliers, according to a survey by industry group Make UK. More than three quarters of these companies increasingly rely on British suppliers.
“The seismic events of recent years have created a potent cocktail of factors that have turned business models upside down,” said Verity Davidge, director of policy at the manufacturers’ association. “For many companies, this means moving away from ‘just in time’ and embracing ‘just in case’.”
The trend is far from straightforward, however, with questions about higher production costs and the UK’s ability to meet demand for reshoring after decades of industrial decline and underinvestment. For many companies – particularly those with large markets on the other side of the world – there will be little point in turning to British suppliers.
“Companies need to be confident that they can meet product quality, availability and cost requirements while being close to their customers and suppliers,” adds Davidge.
“Textile skills are almost extinct in Western Europe,” says Nieper. “The reason there hasn’t been any more onshoring is because there are no more factories to go to onshore.”
As businesses across the UK grapple with rising inflation, disrupted trade and severe staff shortages, the clothing maker’s boss is taking matters into his own hands as he seeks to ease the country’s supply shortages. Or at least Alfreton’s.
Nieper has campaigned for the local school and, as one of the few supporters of an academy in the UK, hopes to invest in a future generation of workers. The school, which was renamed the David Nieper Academy in 2016, was once among the worst in the country and has become the sixth-biggest overbooked in Derbyshire, with almost 800 pupils.
As with the JCB Academy in neighboring Staffordshire – backed by the digger manufacturer and other companies such as Bentley Motors, Network Rail and Rolls-Royce – the idea is that closer links with education could help UK industry grow.
“Everyone complains and says, ‘You can’t get any workers.’ Well, they just have to go ahead and do something about it,” says Nieper. He acknowledges that corporate involvement in education can be controversial (“The city was skeptical. What does a private employer who comes along do?”), but says supporting the school is one way to boost the local economy .
“If you fail a generation of children, you will collapse a city’s economy. It slowly burns as they grow up if it’s not fixed,” he says, describing Alfreton as a “classic forgotten town” that kids tend to want to leave when they grow up. “If a school fails for 10 years, it will take a toll on the entire economy, leaving people with low levels of education and low ambitions.”
More progress needs to be made. The school received a ‘needs improvement’ rating from Ofsted at its last inspection in May 2019 – although it was commended for the ‘tireless’ work of its principal, Kathryn Hobbs.
“Kids may not have the opportunities that they have in other areas, but it’s our job to provide that,” says Hobbs, who grew up near Alfreton but was one of many who left. She came back to take on the challenge of transforming the school.
Textiles once formed the backbone of the Industrial Revolution, with former mining and milling towns like Alfreton at the heart of industry. However, today only 3% of the clothes worn in Britain are made domestically. With globalization enabling the offshoring of manufacturing and amid a shift in advanced economies towards service sector activities, UK manufacturing has shrunk from more than a quarter of the economy in the 1970s to around 10% today.
The idea of Britain stopping making things was one of the many reasons former industrial cities voted overwhelmingly in favor of Brexit. Seeing an opportunity, Boris Johnson visited the David Nieper factory on the Brexit campaign trail in 2016 and used it to sew together a Vote Leave flag in the workshop. He joked that the EU was a “poorly designed undergarment” and quipped: “Panties to anyone badmouthing Britain.”
UK exports to the EU plummeted 40% in the first month after Johnson’s deal went through. Despite a recovery, the country’s trade performance still lags behind comparable developed countries. Post-Brexit border issues and red tape, which do little to help British manufacturing, are driving up costs for businesses, while tighter migration rules have exacerbated labor shortages.
Walking around the David Nieper factories scattered across Alfreton, few non-English voices can be heard. Nieper says there are some Polish and Lithuanian workers while there are now three Ukrainian refugees in the school. It prides itself on employing a predominantly locally-born workforce. “It’s much better if the economy can grow out of the city.”
Nieper has faced disruption and higher costs since Brexit, but his boss says sales to France and Germany remain strong. Because its products are made in the UK, they are considered duty-free when sold in the EU, unlike originally Asian-made clothing that many competitors export. However, most UK retailers are selling overseas-made garments, leading to a slump in UK clothing exports to the EU.
“With Brexit it was difficult to get supplies. With Covid and now with supply chain issues, you can’t get anything anymore, so we decided to bring it home,” explains Nieper.
Despite his optimism, major retailers are skeptical about the chances of a widespread return of fully domestic supply chains. Nieper might be able to sell dresses for around £150 apiece – reflecting higher salaries and production costs than abroad – to a largely older, affluent demographic. But it won’t be affordable for everyone.
Archie Norman, chairman of Marks & Spencer, told the high street giant’s annual general meeting that he would like to source more product from the UK, but “we have to be realistically competitive and we’ve lost the ability” to manufacture locally . I don’t think we’ll see that on a large scale [British clothing manufacturing] anytime soon,” he said.
Amid Brexit uncertainty, the coronavirus pandemic and political chaos at the heart of government, business investment needed to increase the supply capacity of Britain’s industrial base has flattened. Spending remains 10% below pre-Covid levels. The government’s independent economic forecaster estimates that Brexit will affect production capacity by 2% in the long term.
Nieper believes more companies need to invest seriously in the UK to counteract these headwinds. He also slams M&S for being part of the problem, having outsourced its supply chain in recent decades to keep up with fast fashion competition. Such moves had a major impact on the Midlands and North of England, historically home to the textile industry.
“When they went abroad, those factories closed and everything else fell down like a deck of cards.”
Things could change. M&S is piloting production of some of its Jaeger brand clothes in the UK, while most of the furniture it sells is made in Wales and half of its own-brand beauty products are made locally.
Consumers are becoming increasingly aware of the environmental and ethical implications of fast fashion. The industry’s carbon footprint is huge, with Oxfam estimating that manufacturing all jeans owned in the UK is responsible for CO2 emissions equivalent to what would have flown around the world on an airplane more than 2,300 times.
While reshoring could cut mileage and help UK industry, there are concerns that the UK’s typically higher production costs could mean higher prices or less choice for pressured consumers.
It’s a challenge that, according to Nieper, must be overcome. “The secret of our evolution into a more prosperous nation is to start creating value [through more manufacturing]. But we need massive retraining.
“You have to drive up slowly. It won’t happen all at once. But if we raise them all, it would help the country as a whole.”