Wednesday, October 27News That Matters

Boohoo cuts hundreds of suppliers to fashion new future after factory scandal

Online fashion retailer Boohoo says it has cut its network of suppliers by more than 400 firms as it moves to restore faith in its products following allegations of slave labour.

The company – among the big winners during the COVID-19 pandemic partly thanks to the fact it was shielded from the enforced closure of high street rivals – published a list of 78 companies with 100 factories it had now approved.

A statement said it had ceased doing business with a number of manufacturers who were “unable to demonstrate the high standard of transparency required, despite being provided with opportunities to address any issues identified in the auditing process”.

It also declared that unapproved subcontracting had been stopped.

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Boohoo has been working to bolster oversight of its supply chain since ordering an independent review last summer when renewed media claims, relating to working conditions at factories in Leicester, surfaced.

They included allegations of long hours for wages as low as £3.50 an hour and sparked a £1bn hit to its share price.

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Alison Levitt QC, who led the inquiry, identified a historic failure by Boohoo to act quickly enough to tackle the issue.

The company later said it had severed ties with up to 60 suppliers and was moving to eliminate sub-contracting because of the “serious issues” found.

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Boohoo facing possible US import ban

However, Sky News revealed earlier this month that Boohoo was facing an investigation in the United States that could lead to an import ban.

MPs, just days later, called on Boohoo to request that a long-term bonus scheme announced last year, linked to share price growth and potentially worth £150m to top bosses, was linked to improvements in its supply chain.

The Environmental Audit Committee also demanded that the company improved transparency over its supply chain.

Boohoo, on Thursday, published the full list of companies it was using to make its clothing.

Chief executive John Lyttle said: “This is the not the end of a project for us at Boohoo but the beginning of a new way of working with our suppliers.

“We are driving positive change in the industry and want to play our part in rebuilding a vibrant manufacturing base in Leicester, one that offers good employment and great prospects for the workers and the industry in Leicester as
a whole.

“The publication of our UK Supply Chain List marks another step on our journey towards greater transparency and embedding positive change, not only in our own organisation, but through the wider network of businesses that make up our supply chain.”