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You probably recall the stories about Leicester’s clothing industry in recent years: grim labour conditions, pay below the minimum wage, “dark factories” serving the fast fashion sector. What is less well known is what happened next. In short, the industry has cratered.

In the wake of the recurrent scandals over “sweatshop” conditions in Leicester, the majority of major brands have now abandoned the city, triggering an implosion in production in the place that once boasted that it “clothed the world”.

And now Leicester faces a further existential double-threat: competition from Chinese companies like Shein and Temu, and the impending arrival of cheap imports from India, following the recent trade deal signed with the UK. Many worry it could spell an end for the city’s fashion business altogether.

Gauging the scale of the recent collapse is challenging because many of the textile and apparel factories in Leicester are small operations that can start up and shut down rapidly, but according to data provided to Sky News by SP&KO, a consultancy founded by fashion sector veterans Kathy O’Driscoll and Simon Platts, the number has fallen from 1,500 in 2017 to just 96 this year. This 94% collapse comes amid growing concerns that British clothes-making more broadly is facing an existential crisis.

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In an in-depth investigation carried out over recent months, Sky News has visited sites in the city shut down in the face of a collapse of demand. Thousands of fashion workers are understood to have lost their jobs. Many factories lie empty, their machines gathering dust.

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The vast majority of high street and fast fashion brands that once sourced their clothes in Leicester have now shifted their supply chains to North Africa and South Asia.

And a new report from UKFT – Britain’s fashion and textiles lobby group – has found that a staggering 95% of clothes companies have either trimmed or completely eliminated clothes manufacturing in the UK. Some 58% of brands, by turnover, now have an explicit policy not to source clothes from the UK.

Seamstresses in former Leicester factory
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Seamstresses in one of the city’s former factories

Clothing industry workers in Leicester
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Clothing industry workers in Leicester

Jenny Holloway, chair of the Apparel & Textile Manufacturers Association, said: “We know of factories that were asked to become a potential supplier [to high street brands], got so far down the line, invested on sampling, invested time and money, policies, and then it’s like: ‘oh, sorry, we can’t use you, because Leicester is embargoed.'”

A trade fair tries to reignite enthusiasm for the city's clothing industry
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A trade fair tries to reignite enthusiasm for the local clothing industry

Tejas Shah, a third-generation manufacturer whose family company Shahtex used to make materials for Marks & Spencer, said: “I’ve spoken to brands in the past who, if I moved my factory 15 miles north into Loughborough, would be happy to work with me. But because I have an LE1, LE4 postcode, they don’t want to work for me.”

Shahtex in Leicester used to make materials for Marks & Spencer
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Shahtex in Leicester used to make materials for Marks & Spencer

Tejas Shah is a third-generation manufacturer
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Tejas Shah, of Leicester-based firm Shahtex

Threat of Chinese brands Shein and Temu

That pain has been exacerbated by a new phenomenon: the rise of Chinese fast fashion brands Shein and Temu.

They offer consumers ultra-cheap clothes and goods, made in Chinese factories and flown direct to UK households. And, thanks to a customs loophole known as “de minimis”, those goods don’t even incur tariffs when they arrive in the country.

An online advert for Chinese fast fashion company Shein
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An online advert for Chinese fast fashion company Shein

According to Satvir Singh, who runs Our Fashion, one of the last remaining knitwear producers in the city, this threat could prove the final straw for Leicester’s garments sector.

“It is having an impact on our production – and I think the whole retail sector, at least for clothing, are feeling that pinch.”

Inside one of the city's remaining clothesmakers
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Inside one of the city’s remaining clothesmakers

While Donald Trump has threatened to abolish the loophole in the US, the UK has only announced a review with no timeline.

“If we look at what Trump’s done, he’s just thinking more about his local economy because he can see the long-term effects,” said Mr Singh. “I think [abolishing de minimis exceptions] will make a huge difference. I think ultimately it’s about a level playing field.”

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Tide turns as TPG leads talks to lead digital bank fundraising

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Tide turns as TPG leads talks to lead digital bank fundraising

TPG, the American private equity giant, is in advanced talks to take a stake in Tide, the British-based digital banking services platform.

Sky News has learnt that TPG, which manages more than $250bn in assets, is discussing acquiring a significant shareholding in the company.

Sources said that Tide’s existing investors were expected to sell shares to TPG, while a separate deal would involve another existing shareholder in the company acquiring newly issued shares.

The two transactions may be conducted at different valuations, although both are likely to see the company valued at at least $1bn, the sources added.

The size of TPG’s prospective stake in Tide was unclear on Monday.

Earlier this year, Sky News reported that Tide had been negotiating the terms of an investment from Apis Partners, a prolific investor in the fintech sector, although it was unclear whether this would now proceed.

Tide has roughly 650,000 SME customers in both Britain and India, with the latter market expanding at a faster rate.

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Morgan Stanley, the Wall Street bank, has been advising Tide on its fundraising.

Tide was founded in 2015 by George Bevis and Errol Damelin, before launching two years later.

It describes itself as the leading business financial platform in the UK, offering business accounts and related banking services.

The company also provides its SME ‘members’ in the UK a set of connected administrative solutions from invoicing to accounting.

It now boasts a roughly 11% SME banking market share in Britain.

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Tide, which employs about 2,000 people, also launched in Germany last May.

The company’s investors include Apax Partners, Augmentum Fintech and LocalGlobe.

Chaired by the City grandee Sir Donald Brydon, Tide declined to comment on Monday.

TPG also declined to comment.

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Trump trade war could still see America come off worse

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Trump trade war could still see America come off worse

It is a trade deal that will “rebalance, but enable trade on both sides,” said Ursula von der Leyen after the EU and US struck a trade deal in Scotland.

It was not the most emphatic declaration by the president of the European Commission.

The trading partnership between two of the biggest markets in the world is in significantly worse shape than it was before Donald Trump was elected, but this deal is better than nothing.

As part of the agreement, European exports to the US will be hit with a 15% tariff. That’s better than the 30% the bloc was threatened with but it is a world away from the type of open and free trade European leaders would like. The EU had offered tariff free trade to the US just weeks before the deal was announced.

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Instead, it has accepted a 15% tariff and agreed to ramp up its energy purchases from the US.

The EU tariff on US imports will remain close to zero but Europe did get some important exemptions – on aviation, critical raw materials, some chemicals and some medical equipment. That being said, the bloc did not achieve a breakthrough on steel, aluminium or copper, which are still facing a 50% tariff. It means the average tariff on EU exports to the US will now rise from 1.2 % last year to 17%.

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There is also confusion over the status of pharmaceuticals – an important industry to Europe. Products like Ozempic, which is made in Denmark, have flooded into the US market in recent years and Donald Trump was threatening tariffs as high as 50% on the sector.

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US and EU agree trade deal

It appears that pharmaceuticals will fall under the 15% bracket, even though President Trump contradicted official announcements by suggesting a deal had not yet been made on the industry. The risk is that the implementation of the deal could be beset with differences of interpretation, as has been the case with the Japan deal that Trump struck last week.

It also risks fracturing solidarity between EU states, all of which have different strategic industries that rely on the US to differing degrees. Germany’s BDI federation of industrial groups said: “Even a 15% tariff rate will have immense negative effects on export-oriented German industry.”

The VCI chemical trade association said rates were still “too high”. For German carmakers, including Mercedes and BMW, there was some reprieve from the crippling 27.5% tariff imposed by Trump. The industry is Europe’s top exporter to the US but the German trade body, the VDA, warned that a 15% rate would “cost the German automotive industry billions annually”.

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Who’s the winner in the US-EU trade deal?

Meanwhile, François Bayrou, the French Prime Minister, described the agreement as a “dark day” for the union, “when an alliance of free peoples, gathered to affirm their values and defend their interests, resolves to submission.”

While the deal has divided the bloc, the greater certainty it delivers is not to be snubbed at.

Markets bounced on the news, even though the deal will ultimately harm economic growth.

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‘Millions’ of EU jobs were in firing line

Analysts at Oxford Economics said: “We don’t plan material changes to our eurozone baseline forecast of 1.1% GDP growth this year and 0.8% in 2026 in response to the EU-US trade deal.

“While the effective tariff rate will end up at around 15%, a few percentage points higher than in our baseline, lower uncertainty and no EU retaliation are partial offsets.”

However, economists at Capital Economics said the economic outlook had now deteriorated, with growth in the bloc likely to drop by 0.2%. Germany and Ireland could be the hardest hit.

While the US appears to be the obvious winner in this negotiation, uncertainty still hangs over the US economy.

Trump has not achieved his goal of “90 deals in 90 days” and, in the end, American consumers could still bear the cost through higher prices.

That of course depends on how businesses share the burden of those higher costs, with the latest data suggesting that inflation is yet to rip through the US economy. While Europe determined on Sunday that a bad deal is better than no deal, some fear that the worst is yet to come for the Americans.

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US and EU agree trade deal, says Donald Trump

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US and EU agree trade deal, says Donald Trump

The United States and European Union have agreed a trade deal, says Donald Trump.

The announcement was made as the US president met European Commission chief Ursula von der Leyen at one of his golf resorts in Scotland.

Speaking after talks in Turnberry, Mr Trump said the EU deal was the “biggest deal ever made” and it will be “great for cars”.

The US will impose 15% tariffs on EU goods into America, after Mr Trump had threatened a 30% levy.

He said there will be an EU investment of $600bn in the US, the bloc will buy $750bn in US energy and will also purchase US military equipment.

Mr Trump had earlier said the main sticking point was “fairness”, citing barriers to US exports of cars and agriculture.

He went into the talks demanding fairer trade with the 27-member EU and threatening steep tariffs to achieve that, while insisting the US will not go below 15% import taxes.

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For months, Mr Trump has threatened most of the world with large tariffs in the hope of shrinking major US trade deficits with many key trading partners, including the EU.

Ms von der Leyen said the agreement would include 15% tariffs across the board, saying it would help rebalance trade between the two large trading partners.

In case there was no deal and the US had imposed 30% tariffs from 1 August, the EU has prepared counter-tariffs on €93bn (£81bn) of US goods.

Ahead of their meeting on Sunday, Ms von der Leyen described Mr Trump as a “tough negotiator and dealmaker”.

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