Sunday, 20 December 2015

the value of fashion

London Fashion week justifies its funding with a document called "The Value of Fashion", written for them by Oxford Economics. Flicking through the pdf pages, it becomes obvious that they're about the value of clothes shops like the ones that sponsored the document. A bit like writing a report called "The Value of Banks". Another odd thing about the document is that it got some public sponsorship from UK Trade and Investment, who pay for some visitors to go to London Fashion Week, and the bit of the Greater London Authority that was then London Development Agency. I don't think taxpayers got good value from the report. For example you can't claim that Sports Direct is part of some specially useful or beneficial industry that deserves government encouragement and subsidised trade shows.

Meanwhile, if clothes shops really do contribute a lot to the economy, some of them find ways of not paying tax. Monsoon Accessorize PLC have called for clothes shops not to be taxed if they use the word "ethical" occasionally (this is from a firm that pays its UK suppliers late and breaks minimum wage law in both India and the UK) and Arcadia Group pays its tax in the boss's wife's name, at the Monaco income tax rate of zero. has some background:

The Value of Fashion: Sir Philip Green

Philip Green is a multi-billionaire businessman, who runs some of the biggest names on British high streets. His retail empire includes brands such as Topshop, Topman, Dorothy Perkins, Burton, Miss Selfridge and British Home Stores.

Philip Green is not a non-dom. He lives in the UK. He works in the UK. He pays tax on his salary in the UK. All seems to be in order. Until you realise that Philip Green does not actually own any of the Arcadia group that he spends every day running. Instead, it is in the name of his wife who has not done a single day’s work for the company. Mrs Green lives in Monaco, where she pays not a penny of income tax.

In 2005 Philip Green awarded himself £1.2bn, the biggest paycheck in British corporate history. But this dividend payout was channeled through a network of offshore accounts, via tax havens in Jersey and eventually to Green’s wife’s Monaco bank account. The dodge saved Green, and cost the tax payer, close to £300m. This tax arrangement remains in place. Any time it takes his fancy, Green can pay himself huge sums of money without having to pay any tax.

Before the election, the Lib Dems liked to talk tough on tax avoiders. But as soon as they entered the coalition, this pre-election bluster became just another inconvenient promise they quietly forgot. In August David Cameron appointed the country’s most notorious serial-tax avoider to advise the government on how best to slash public spending. Not a single Lib Dem minister uttered a word of complaint. A Guardian editorial denounced this as “shameful”.

Philip Green’s £285m tax dodge could pay for:
  • The full, hiked up £9,000 fees for almost 32,000 students
  • Pay the salaries of 20,000 NHS nurses
And if that’s not reason enough to take action against Sir Philip, it is worth noting that he has built his £5bn fortune on the back of sweatshop labour, using Mauritius sweatshops where Sri Lankans, Indians and Bangladeshis toil 12 hours a day, six days a week, for minimal pay.
Arcadia Group isn't singled-out for being a bad company like its rival, Sports Direct, but the practice of using minimum wage zero hours contracts is common in retail.

More than 1 million British workers could be employed on zero-hours contracts, new figures released on Monday reveal, suggesting that British business is deploying the controversial employment terms far more widely than previously thought.

The Value of Fashion: Sports Direct

Sports direct admit that 90% of UK staff are on zero hours contracts.

Three staff at the department for business are trying to think of an answer according to the minister. Oh and Sports Direct make no statement about the conditions in their Vietnamese factory suppliers. Oh and no badness is meant towards the lawyer who got IP work for sports direct and volunteered for a few board meetings at Ethical Fashion Forum after offering free IP surgeries to UK business at a neighbouring project called own-it.

The Guardian have a page about Sports Direct
One of the articles lists accusations, but leaves one out: the company is less hypocritical than others. It offers fake markdowns and says that's legal. It pays less than the minimum wage and maybe that's not quite legal but it has a defence in saying that some hours are spent waiting to be haranged and searched. It has a staff handbook which states you can be sacked for more or less anything, and, if no reason can be thought of, most of the staff are from two rival temp agencies anyway so a word can be had with the agency. This again might not be quite legal but is common enough. Most of us have had jobs a bit like this, but Sports Direct forces politicians to think about it, rather than hiding the facts in detail and denying them as adult social care providers do for your granny's weekly visit from a care assistant.

Here is the quote:

Ashley’s Sports Direct chain has made him the 22nd richest man in Britain, estimated by the Sunday Times Rich List to be worth £3.5bn. Temporary workers at his warehouse, by contrast, get paid hourly rates that work out below the minimum wage and suffer the kind of indignities – including rigorous harangues over the public address system to work faster – that come straight from a dystopian novel. Ashley, as well as being very rich, is also the unpopular owner of Newcastle United. The items he sells are made cheaply in east Asia. His warehouse depends on cheap eastern European labour. Few individuals so neatly encapsulate the fortunes, in both senses, of modern Britain.

To do list and note to self: try to catch-up with this stuff. Those who read more newspapers and belong to trade associations probably find them a year earlier, but hey.

The Alliance Report - repatriating UK textiles manufacture

All Party Manufacturing Group

High End Designer Manufacturing

A report on Protecting Existing Resource and Encouraging Growth and Innovation

Report commissioned by the British Fashion Council, UK Fashion & Textile Association, Creative Skillset and Marks & Spencer Research by Oxford Economics and Glasgow Caledonian University

Steering Group
Introduction by Caroline Rush p4
Executive Summary p7
Key Findings p8
part 1
Introduction p10
CASE STUDY 1: Mulberry p14
part 2
Background Context p16
CASE STUDY 2: John Smedley p28
part 3
Survey Results p30
CASE STUDY 3: Sourgrape p34
part 4
Modelling Results p36
CASE STUDY 4: Private White V.C. p40
part 5
Conclusions, Challenges & Recommendations p42
part 6
Methodological Appendix p46
part 7
Acknowledgements p50

Update: last year the British Fashion Council commissioned a new report, with the usual bias towards people who talk about fashion, and high fashion, but with two sets of economists instead of one and some attempt to contact real manufacturers among the list. One of the sets of economists work at a college that runs London fashion courses, rather than factory training, but at least the use of two should encourage them to spot each others' special effects. There are even a couple of shoe factory people interviewed on the list from - Norman Walsh and Grenson.
Note to selt: read the report, which is called High End Designer Manufacturing

PlanB4fashion ethical fashion blog on a single long page
This blog is by a vegan shoe company called that sells vegan shoes boots & belts

No comments:

Post a Comment