Two Case Studies Demonstrate Contrasts In Domestic Production Outcomes

As anyone watching the news in the UK over the last couple of years will have seen, exposés on different parts of the domestic supply chain have shown that moving an opaque supply chain closer to home doesn’t solve for that opacity.

This week, Sky News released a sobering documentary exploring the aftermath of the most visible of those scandals, which focuses on the garment manufacturing industry in the UK city of Leicester, which has, for the last decade or so, been one of the country’s last remaining production hubs. Now, burdened by stigma the city’s garment trade is seemingly undergoing a slow collapse. 

That collapse can’t solely be laid at the doorstep of bad actors, though they certainly existed, and neither can be ascribed to the impact of companies like Shein and Temu, although the way they changed consumer expectations for price, volume, and variety will definitely have been a factor. The bulk of the blame, it seems, lies with the way brands and governments alike approached domestic  manufacturing – not as a way to do things differently, but as an opportunity to bring the same hands-off approach that defined the offshore era closer to home. 

In practice, this meant booking capacity, and turning something of a blind eye to wages, the same way it’s typically done when the contractor is a continent away: with extremely limited visibility. So it’s hardly unpredictable that, when the labour scandals surfaced, the retreat from brands was fast and near total; after being shown something they didn’t know, but by rights should have known, the easy response is to simply abandon the idea of making in-country completely.

To be clear: that response is disproportionate, but based on the level of visibility the typical brand sourcing from the UK hotspot had – i.e. very little – there was realistically little alternative.  It wasn’t just the guilty who were abandoned, it was the entire region. Once the scandal surfaced, the absence of deep relationships (many of the factories were “dark”) and operational transparency left brands with only one move: exit.

Whatever the reason behind it, the outcome remains catastrophic for anyone seeking to demonstrate the viability of Sky News reports that Leicester has lost 90% of its garment factories since 2017.

(There are, to be clear, other companies and bodies approaching domestic UK production from a different angle, on a smaller scale and with more supportive technological foundations, but they are still a fraction of the country’s manufacturing base compared to the scale of production that was being done in Leicester.)

But this is only one side of the domestic manufacturing story. There are wins worth learning from. Some British brands have found ways to build closer and with more responsible production relationships. John Smedley for one, Burberry another (though their recent announcement of job cuts shows how delicate the balance of production vs profit can be). The difference is that these models rely on proximity married to visibility – whether through embedded teams, regular presence, or tech-led infrastructure that makes cost, time, and quality, measurable in real time. 

Then there’s Hermès: the luxury titan at the complete opposite end of the spectrum – approaching domestic production with ownership, control, quality, and uncompromising ethics and visibility as standard.. With more than 20 wholly owned French factories, and a new one announced just this week, Hermes continues to demonstrate  that domestic manufacturing is not only viable, but it can be world leading when it’s governed according to a very precise set of rules. 

Of course, this is a completely different business model. A Birkin bag costs thousands, but what matters more is the structure: Hermes doesn’t outsource quality, transparency, or any other elements of its brand. It trains it, controls it, and as a result, is able to predict it and protect it. There’s no opacity to hide behind, but neither is it necessary when complete visibility and control is the default mode.

Hermes’ model is not reliant on the concept of a nostalgic return to craft. It’s a cold hard strategy. One built on decades of investment in skill, structure, and cultural capital. (There is a counter-argument that this strategy monopolises the skillbase of craftspeople in France, making sure that other brands can’t access the same pool of artisans, but this is a different conversation.)

Vertical integration of this type isn’t a one size solution. But its core benefits – alignment, investment, and internal capability – can offer lessons. The UK’s post-Brexit push to reshore manufacturing could, and should, have started with some core principles: what does it take to make domestic production resilient? The answer starts with ownership of the problem and visibility into the variables that determine the outcomes. Not necessarily financial ownership of suppliers, but operational ownership of processes. What does good output look like? What should it cost? How long should it take? Tools and internationally-approved standards already exist to answer these questions, they just need manufacturers to apply them systematically and brands to embrace the same structures. Shared standards are a pathway to greater visibility, and, with it more sustainable domestic production. 

If there’s a middle path between the hidden issues of Leicester and the perfectionism of Hermès and similar models that rely on vertical integration or majority investment in production partnerships, it likely runs through technology. Costing models built on objective scientific data,, real-time compliance tracking, this tech is already being implemented across the globe, and with good reason. Used properly, it can help close the trust gap between brands and their partners. It means government support that goes beyond slogans;evidence suggests that Boris Johnson’s “Levelling Up” campaign has largely failed to deliver. It means inviting brands into the room and involving them in process audits, planning cycles, and capability development – and vice versa, forging tighter links between companies that, in many cases, are a couple of hours’ drive away from one another. 

There is a growing will among UK fashion brands to try again. There is continued perseverance amongst tech-first microfactory owners to try and make the business model work. But any kind of reshoring wave must acknowledge that local doesn’t mean ethical by default. It has to be designed, built, and resourced.