Boohoo tells suppliers to stop off-loading work to small factories

Boohoo has confirmed it has started telling UK suppliers to stop sub-contracting to smaller firms which might be exploiting workers.

The online fashion giant has faced accusations of failing to do enough to ensure suppliers weren’t outsourcing to companies operating below the radar, and putting profits before working conditions.

Manchester-based Boohoo took a battering last summer after the Sunday Times sent an undercover reporter into a Leicester factory making clothes destined for its websites, which he said was paying workers £3.50 an hour – well below the minimum wage.

Leicester employs something like 10,000 people in fashion and textiles, in around 1,500 businesses, and the city is a key part of Boohoo’s supply chain.

Following the allegations Boohoo set up an independent inquiry into supplier working conditions, headed by senior lawyer Alison Levitt QC.

Her findings said the fast fashion chain knew about “serious issues” with the treatment of factory workers in Leicester in December 2019, but failed to move quickly enough to do anything about it.

She also said Boohoo “capitalised” on the commercial opportunities offered by lockdown – as online sales rocketed – supporting Leicester factories by not cancelling orders, but taking no responsibility for the impact on the people on the shop floor.

And she blamed “weak corporate governance” for Boohoo’s inadequate monitoring of its Leicester supply chain.

In her 234 page summary, Ms Levitt said Boohoo had treated Leicester factory conditions as a low priority even though there was no doubt about poor working conditions and low pay in many Leicester factories.

But she said she saw no evidence to suggest the way the company used its Leicester suppliers had contributed to a localised spike in Covid-19 cases in the city.

When the results of the review were published last September Boohoo chief executive John Lyttle said: “Ms Levitt’s independent review … has identified significant and clearly unacceptable issues in our supply chain, and the steps we had taken to address them, but it is clear that we need to go further and faster to improve our governance, oversight and compliance.

“As a result, the group is implementing necessary enhancements to its supplier audit and compliance procedures, and the board’s oversight of these matters will increase significantly.

“As a board, we recognise that we need to rebuild confidence that these matters will be dealt with appropriately and sensitively, and that they will not recur.”

Now the business has confirmed that it has told its Leicester suppliers to bring all manufacturing in-house in order to ensure better accountability for the complete supply chain.

Reports suggest the business has given them a deadline of March 5 for companies supplying it to stop using third-party labour.

A spokesman for the business said: “As we state in our letter to suppliers, the Boohoo Group is committed to growing our business in a more sustainable and transparent manner.

“Working with suppliers in a more strategic and sustainable way, is a key part of our partnership approach to improve transparency, efficiency and accountability.

“One of the key recommendations from the Alison Levitt QC review was to consolidate our supply chain.

“Supporting suppliers to bring their CMT [cut, make and trim] units in house, shortens our supply chain and is just one of the ways that we are helping them to build stronger more sustainable businesses that can thrive.”

In December Boohoo said it had cut ties with more than 60 of its suppliers in the city over concerns staff were being underpaid and overworked in poor conditions.

The business is also pressing ahead with its own manufacturing plans in the city – with a new factory in Thurmaston Lane.

Business Live – North West