Modern Slavery Statement and Human Trafficking Statement
Headlam Group plc (‘Headlam’ or the ‘Company’) is committed to taking steps and improving its practices to prevent slavery, human trafficking and other human rights violations (including child and forced labour) in both its operations and supply chain.
Headlam is required to publish an annual modern slavery statement on its UK website under the Modern Slavery Act 2015 (the 'Act'), and is the ultimate holding company for the Headlam Group of Companies which includes two trading subsidiaries also required to publish an annual modern slavery statement: HFD Limited (‘HFD’) and MCD Group Limited (‘MCD’).
The Modern Slavery Statement shown below is published on behalf of the Company, HFD and MCD on the website of the Company and covers the information relating to each entity required to be published pursuant to the Act. The Modern Slavery Statement is also published on each of the websites of the various trading entities operated by HFD and MCD.
Slavery and Human Trafficking Statement in respect of the financial year ended 31 December 2019 and as at 5 March 2020
Responsibility and approach
The Chief Executive has responsibility for this statement on behalf of the Board, supported by the Commercial Director who has responsibility for the Company’s supplier base. Local management has day-to-day responsibility for supplier relationships within each business.
The Company understands that the issue of slavery and human trafficking is a global one and that no business sector will be able to eliminate slavery or human trafficking from their supply chain without working collaboratively within its industry.
As part of its commitment, the Company undertakes regular reviews of its supplier base, encourages frequent interaction with suppliers by multiple persons from within its organisation, including members of the Executive Team, and strongly supports and undertakes visits to its’ suppliers manufacturing facilities as frequently as is possible. The Company will immediately suspend purchasing from a supplier, pending an investigation, if it believes there to be any evidence of slavery or human trafficking, and will cease trading with the supplier if the investigation confirms any slavery or human trafficking.
Operating for 27 years and employing over 2,600 people, Headlam is Europe's leading floorcoverings distributor.
Headlam provides the distribution channel between suppliers and trade customers of floorcoverings. Working in partnership with suppliers from 19 countries manufacturing a diverse range of floorcovering products and ancillary accessories, Headlam provides an unparalleled route to market for their products across the UK and certain Continental European territories.
The utilisation of an outsourced distribution channel enables manufacturers to focus on their core activities, incur reduced costs associated with distribution, and benefit from localised sales, marketing and distribution expertise that provides a more effective and greater route to market for their products.
To maximize customer and market penetration, Headlam comprises 66 individual businesses in the UK and Continental Europe (France, the Netherlands and Switzerland) each operating under their own unique trade brand and utilising individual sales teams.
Headlam's extensive customer base, operating within both the residential and commercial sectors and comprising principally independent retailers and flooring contractors, receives the broadest product offering supported by next day delivery as well as additional marketing and other support.
Headlam's offering is enabled through its unrivalled operating expertise, long-established supplier and customer relationships, and comprehensive distribution network. Following years of considerable investment, Headlam's distribution network currently comprises four national distribution hubs, 19 regional distribution centres and a supporting network of smaller warehouse premises, trade counters, showrooms and specification centres.
In 2019, Headlam worked with 190 suppliers and fulfilled over 5.3 million customer orders.
Our Supply Chain and Interaction
In 2019, purchases from suppliers in the EU (including the UK) accounted for approximately 91% of total purchases (based on actual purchase prices from suppliers).
14 of the 19 supplier countries accounted for over 99% of purchases. Of those 14 countries, 4 are non-EU and collectively accounted for 9.2% of total purchases in 2019:
The Company works closely with its suppliers throughout the year, and suppliers are met with as frequently as is possible at the Company’s instigation through:
Frequent interaction is undertaken by the delegated buyers within the Company with regular support from members of the Company’s Executive Team. During all its interactions the Company is committed to stating its commitment to a supply chain free from slavery and human trafficking. Additionally, the Company is committed to reviewing firsthand the suppliers’ operations, facilities and living arrangements (where they are provided by the supplier to their workforce), to better ascertain that its supply chain is free from slavery or human trafficking. The Company also requests and reviews the results of its suppliers’ own audits and any related policies where available.
One of the Company’s businesses (National Carpets) is registered on Sedex (Social, Ethical Data Exchange), an online platform which allows suppliers (including certain of the Company’s suppliers) to register and provide company information/audit reports which can be viewed by their customers. Sedex includes a self-assessment questionnaire which is required to be completed which includes a section on human rights, and the Company views its registered suppliers’ responses.
Actions during 2019
Between January and March 2019, the Company completed an internal audit which looked at the entirety of its supply chain and assessed all its individual suppliers taking into account their country of operation and when their facilities were last visited by the Company and the next scheduled visit. Results from the audit concluded that the Company’s highest risk geographical areas within its supply chain were the countries outside of the EU. During 2019, the Company concentrated on visiting and engaging with its suppliers in those countries. Each of these suppliers were required to complete a tailored modern slavery and human trafficking questionnaire.
The responses were assessed by the Company Secretary and Commercial Director along with any attached policies / procedures with consideration given to the suppliers’ membership, if any, of an online platform, such as Sedex, where policies and reports can be shared. Any response that did not meet the Company’s standards was investigated further, with additional information being requested. Notice of a potential suspension of purchasing will be issued should any information requested not be forthcoming, with the Company visiting those suppliers with information outstanding in 2020 in order to directly review their operations and responses.
Members of the Executive Team, met with representatives from the majority of its supply base, including suppliers from all four of the non-EU countries detailed above during the industry trade shows Domotex Hanover and Domotex Shanghai.
EU supplier facilities are visited quarterly by members of the buying or Executive Team. Manufacturing facilities were visited in all four of the higher risk geographical areas during 2019 and will be again in 2020. During these visits, the Company will again explain its zero-tolerance to slavery and human trafficking, and the results of the questionnaire completed by the supplier will be reviewed and verified.
Ongoing support and resource will be given to the Company’s employees interacting with suppliers to better help them identify slavery or human trafficking practices. Employees are protected by certain policies the Company has in place, including Anti-Corruption and Bribery, Fraud and Anti-Money Laundering and Whistleblowing and these were all reviewed during 2019 to ensure that they continued to be fit for purpose. The Company’s Whistleblowing Policy sets out the formal process by which an employee may, in confidence, raise concerns about possible improprieties in financial reporting or other matters, including any concerns relating to modern slavery.
Any potential new suppliers in higher risk areas will be assessed for modern slavery and human trafficking purposes prior to establishing a business relationship. They will be required to complete a questionnaire detailing their policies and procedures and provide all supporting documentation to the Company’s satisfaction. We will not enter into any business relationship with any new supplier who does not reach our standards during this review. Each new supplier in higher risk areas will be visited and within the first twelve months of establishing the business relationship. Should any potential supplier not reach the high standards demanded by the Company, the Company will work with the supplier to improve its processes. If it is ultimately unable to reach the required standard within a specific timescale, the Company will not work with that supplier.
Effectiveness of procedures
During 2019 all of our suppliers from outside the EU received either a visit or completed a questionnaire. The Company therefore believes its procedures which have been implemented to minimise the risk that slavery and human trafficking does not take place in its business or supply chain are effective. The procedures are reviewed annually by the Board.
This statement was approved by the Board of Headlam Group plc on 5 March 2020 and signed on its behalf by