In the news at last!

Citation

Jones, R. (2007), "In the news at last!", Journal of Fashion Marketing and Management, Vol. 11 No. 2. https://doi.org/10.1108/jfmm.2007.28411baa.001

In the news at last!

In the Editorial to Vol. 9 No. 3 (2005) I highlighted the dramatic collapse which had taken place – without any substantial comment – in both the UK’s apparel manufacturing sector and its manufacturing sector as a whole. In the 20 years from 1986 to 2006, employment in the latter fell from 5.2 million to 3.3 million. In the period 1998 to 2005 the apparel manufacturing sector lost some 82,600 jobs, or some 67 per cent of the total, with almost no comment in the press. In January 2007 alone some 7,000 jobs were lost from the UK manufacturing sector, of which 300 were at the Burberry plant in Treorchy, South Wales. In the 2005 paper I concluded that the survival strategy of choice for most of the remaining apparel manufacturers still based in the UK would inevitably involve a substantial amount of offshore production in low labour cost locations. It is the proposed transfer of jobs from South Wales to China that has sparked the current media interest in the affairs of Burberry. I suppose we should be grateful that the closure of an apparel manufacturing factory – of which there have been many over the last decade – has suddenly been noticed. However, it is less obvious that the majority of the comments made have contributed much to the debate over the future of what is left of the industry in the UK.

In reality the event has become a mixture of show business and politics as a large number of Welsh singers and actors have lined up to burn their Burberrys in protest at the proposed closure – the list includes Tom Jones, Charlotte Church, Rhys Ifans, Ioan Grufudd, Stuart Cable and Bryn Terfel. The company was forced to cancel a planned Bafta reception because of fear of demonstrations. The proposed closure has also become a political issue with Welsh Assembly elections due in May. The directors of Burberry are due to appear before the Commons Welsh Affairs Select Committee to discuss the future of the plant. As a native of that area of South Wales I can easily appreciate the impact of the closure of what is a large employer in the context of the local labour market in an area of very high employment and few alternative opportunities. It is, however, 300 jobs lost out of well over 80,000 over the last ten years in the industry UK-wide. This protest is a little late. In fact, Burberry has operated a policy of mixed UK and offshore sourcing for a long time. It is one of the few success stories of the UK apparel manufacturing sector, although the fact that it has made a profit has been seized upon as demonstrating that it does not need to produce in China. Profits are not a bad thing! In fact in the period 1998 to 2003 some 50 per cent of the companies allocated to the apparel manufacturing sector in the UK went out of business because they could not make a profit. The market is extremely competitive and it is unlikely that any company can afford to ignore offshore production possibilities. In demonstrations against the proposed closure, placards stating “Keep Burberry British” were prominent. What does this really mean? Are we to define a British company as one that only operates in Britain, only employs British citizens or has only British shareholders, or what? These ideas have hardly any real connection to twenty-first century business realities. Burberry, founded in 1856, is truly an iconic British brand. Does it cease to become British if one plant closes? Or more British if it relocates jobs back to the UK? One union official stated that Kate Moss should go to China to do the advertising, but these are the jobs that can best be retained in the UK where we have the expertise. What’s the sense of exporting those jobs as well?

Clearly there are serious issues here, for example issues of re-training and regional policy, issues relating to the image-making impact of country-of-origin labelling and the value of a “Made in Britain ” label, issues relating to the future of such a labour-intensive industry in high labour cost countries, issues of trade policy and protectionism. The problem is that most of these issues are properly the responsibility of governments (or the EU) rather than individual companies and it is almost too late to hold these debates because the industry has already lost so much capacity in so many countries. Nevertheless, there are important questions that can still usefully be considered as, for example, trade policy continually evolves. What is the correct balance between importers and domestic producers in the post quota era? What is the Community interest in the future of the sector? If some level of low-cost trade is necessary to retain non-assembly jobs in member states, what is the logic of the anti-dumping policy? The company itself would have to take into account the marketing issues – is there any real evidence that UK consumers do prefer goods made in Britain, and is there any real evidence that consumers pay any attention to country-of-origin issues? In my reading of the research evidence, the level of risk the company is taking here is very low.

It would be a missed opportunity to consider – however belatedly – the real issues such as the re-emergence of protectionism in the EU textile sector if a real UK success story becomes lost in an essentially wrong-headed and emotional response to this one event. I understand the workers being emotional and that they must use whatever means they can to further their cause, of course. However, it was not without irony that, on the same day as the papers reported the cancellation of the Bafta reception, they also reported the case of a textile company in Hull being saved by inward investment from China. Globalisation is a two-way street – sometimes it will bring jobs in to a country and sometimes it will take them away, but it’s not possible to have the one without the other. In fact it has just been reported that in the UK in 2006 developing countries invested twice as much as in the previous year in purchasing British companies. Finally, the Manchester-based apparel manufacturer Umbro has announced – while the Burberry issue was on-going – that it is to increase its presence in China by means of a joint venture company to take advantage of an anticipated boom in demand for sportswear ahead of next year’s Olympic Games in Beijing. Are we to stop them? Does this make them less British? The fact of the matter is that the apparel manufacturing sector (in the absence of a collapse of the trade system) will never again be a major employer in high labour cost countries like the UK. We will have success stories but most will have substantial production offshore. What do we want to do – drive them out completely?

Richard JonesCo-editor