Mary Portas: how to kick-start a recovery in British manufacturing

Mary Portas - founder of British-made lingerie start-up label 'Kinky Knickers' - talks to Merryn Somerset Webb about the re-birth of British manufacturing.

This week I went to meet Mary Portas, retail guru, shopping columnist and star of BBC2's Mary Queen of Shops as well as Channel 4's Mary Portas: Secret Shopper.

I am more in the habit of interviewing fund managers and politicians than TV stars. But we've been talking in the office for some time now about 'reshoring' the new trend by which Western companies are starting to bring some of their manufacturing home. So when I saw that this is essentially the subject of Mary's new TV programme, Mary's Bottom Line, I figured she might have something to add to the debate. And she does it seems that her new mission is to kick-start a recovery in British manufacturing.

Mary's Bottom Line follows her progress as she teams up with Middleton-based nightwear manufacturer Headen and Quarmby to see if she can produce, sell and make a profit from a new range of British-made underwear and prove in the process that British manufacturing can still work.

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It wasn't an easy task. Finding a viable factory took months, and eventually involved bringing an all-but-abandoned sewing room back into use (until Mary turned up, Headen and Quarmby had shifted all their manufacturing abroad).

Finding British lace for the knickers was equally challenging: in the end it was made by lace maker Jim Stacey who, being one of the very few producers left in the UK, sub-lets part of a factory and lives on a houseboat to keep his costs low enough for survival.

The final result is 30,000 (and rising) pairs of knickers made almost entirely in Britain (the threads are not British, nor is the label fabric but everything else is); sales to the UK's most high-profile retailers; life-changing experiences for a few of Middleton's 800 unemployed young people; and some really good telly. You can see how it all happened and get Mary's take on the various crises that came with it from floppy lace to reluctant stockists.

The collapse of the British high street

So how did it all start? TV company Endemol approached Mary and asked her to make a programme that attempted to "make a pair of jeans for the same price as Primark" in Britain. She turned them down partly because she didn't think it would be possible and partly because, as she puts it, "on a moral basis, it's the last bloody thing I want to do. Why would I want to do that? We've lost so much in this country with our obsession with value we've lost the real sense of what value is".

Mary puts the collapse of Britain's high streets and in many cases the communities around them down in part to the growth of value retail chains; chains that "didn't invest in service, that didn't invest in experience, that didn't invest in the consumer" and that, once the crisis had hit, "closed so many of their doors in the tertiary towns", leaving nothing but empty shop fronts behind.

The loss of economic capital meant the loss of social capital too. If you go somewhere where local high streets are thriving, "property prices increase, social capital increases, people feel safe. They want to work there, they want to socialise there". Take away the social capital and all too soon you get a "slum area". That at least was the conclusion of her research when she was commissioned last year to write a review into the state of our high streets by the government.

Does she think then that we have been, and still are, too lenient with our supermarkets and their out-of-town developments? She does. The problem is partially that we have allowed the supermarkets to be an oligopoly. But it is also because of the "displacement" effect of increasing what they can sell. It started with food, but then they took over beauty, fashion, pharmacy and opticians too. When Sainsbury's started selling clothes, they "took 11% of the fashion market just like that".

The return of manufacturing

However, while she didn't want to be part of the value market, what she saw of the spiralling destruction of communities as a result made her wonder if the show might work with another better angle. She took the idea of manufacturing quality fashion in Britain to Endemol's super-producer Colette Foster. Foster sold it to Channel 4 and they were off.

So why knickers? "I've had this obsession for about ten years that if I was going to do a product I wanted to do a knicker brand the Americans have Calvin, the Aussies have Aussiebum but we haven't got a famous knicker brand," and certainly not one with the "sex, naughtiness and attitude" that Mary reckoned she could bring to hers now branded Kinky Knickers.

It was also about the textile industry. It drives Mary crazy that over 90% of clothing in the UK is imported. She is furious that 338.5 million pairs of pants were imported into Britain in 2010 (Marks & Spencer alone sells 61 million-odd a year) when some of them could have been made here.

And it bothers her that, despite the fact the fashion industry is worth around £21bn to the UK economy, more than half of the full-time jobs in the fashion and textiles sector have disappeared in the last ten years. At the moment a mere 340,000 people (and falling) are still employed in the sector and that's forecast to fall by another 85,000 in the next ten years.

Mary reckons we haven't got much time left to reverse this trend. The skills are still there, but the people with the real skills the machinists and so on are "in their late 50s". They are "brilliant" but they are the last lot.

So how did she hire for the new production line? She used Skillsmart Retail (a part-government-funded group that focuses on the skills retailers need) to help with the interviewing. Mary "dipped in and dipped out" of the process. She found a fair number of people queuing up simply to meet the criteria for keeping their jobseeker's allowance.

But she also found a few people who she thinks will go very, very far: "Out of the eight that I have chosen, I will tell you for sure now there will be two of those that will go on to manage and be off the scale".

A new industrial policy forBritain?

So how many pairs of pants will the eight chosen ones be making? When I spoke to Mary, she had orders for 30,000 in the bag from Boots (which is "so amazing"), from Liberty, from Selfridges, from House of Fraser and from ASOS ("a great business"). She wants orders for 100,000 something she expects to happen pretty quickly once the show airs you can't get much better PR for a product than three shows on prime-time Channel 4. Still, I say, it's a lot of work for three TV shows. Yes, says Mary, "but it is real quality stuff". And of course it isn't just a TV programme"it is so key and I get very emotional about it".

For Mary this is about making "people and places" come first; about putting communities in some way at the heart of business. "When I went to Middleton I saw this incredible factory to one side that for generations fed the town. For generations those women went in there and their sisters and their mothers the shops were open for them and the pubs were open for them. And then I saw that closed and on the left hand I saw Tesco's. A massive Tesco's. And do you know what they said to me? Tesco's has been good. It paid for the swimming pool. And I thought, at what cost?"

What Mary really wants now is that what she is doing to be about more than Kinky Knickers. She wants to see other companies shifting back to manufacture in the UK even if it is just a tiny percentage of what they do. Imagine if M&S manufactured just 10% of their 61 million pairs of pants in Britain.

So what might make it happen? Mary and I agree that nothing talks like money or, when it comes to corporate Britain at least, tax breaks. I reckon an indefinite employer's National Insurance holiday for firms that manufacture a certain percentage of their products in the UK (for example, 35%) would do the trick. Or if not that, how about a sliding scale of corporation tax? Those who manufacture 100% in Britain pay almost nothing; but those who continue to manufacture everything abroad pay the full whack.

You will say this all sounds remarkably like an industrial policy and that is the last thing we need. But we already do a lot of this kind of thing ad hoc. Why do you think Nissan decided to manufacture its Invitation model in Sunderland? Because it is the best place in the world for a factory or because the UK taxpayer gave the firm £9.3m to think it might be? Quite.

Reshoring is beginning to make financial sense for businesses as wages rise in Asia and high transport costs eat into margins. But getting this kind of trend going needs a nudge. You've heard Mary's ideas and you've heard mine as to what that nudge might be. We'd like to hear yours. You can pop them on the blog or tweet them to me I'm on @merrynsw.

Mary's Bottom Line will be on at 9:00pm on Channel 4 for the next three Thursday nights.

Merryn Somerset Webb

Merryn Somerset Webb started her career in Tokyo at public broadcaster NHK before becoming a Japanese equity broker at what was then Warburgs. She went on to work at SBC and UBS without moving from her desk in Kamiyacho (it was the age of mergers).

After five years in Japan she returned to work in the UK at Paribas. This soon became BNP Paribas. Again, no desk move was required. On leaving the City, Merryn helped The Week magazine with its City pages before becoming the launch editor of MoneyWeek in 2000 and taking on columns first in the Sunday Times and then in 2009 in the Financial Times

Twenty years on, MoneyWeek is the best-selling financial magazine in the UK. Merryn was its Editor in Chief until 2022. She is now a senior columnist at Bloomberg and host of the Merryn Talks Money podcast -  but still writes for Moneyweek monthly. 

Merryn is also is a non executive director of two investment trusts – BlackRock Throgmorton, and the Murray Income Investment Trust.