FACTORY FLAWS:
BOOHOO TO ADDRESS SUPPLY CHAIN ISSUES
AN INDEPENDENT review for fashion retailer Boohoo found failings in its English supply chain after allegations about working conditions and low pay, the company said last Friday (25), as it set out the steps it was taking to tackle the issues.
Boohoo commissioned the review, headed by senior lawyer Alison Levitt, in July after damaging British media reports about factory working conditions in Leicester.
“Ms Levitt is satisfied that Boohoo did not deliberately allow poor conditions and low pay to exist within its supply chain. It did not intentionally profit from them and its business model is not founded on exploiting workers in Leicester,” Boohoo said in a statement.
Shares in the company, which sells own-brand clothing, shoes, accessories and beauty products targeted at 16- to 40-year-olds, were up 11 per cent last Friday, on track to regain much of the market value they had lost since the July media report.
Boohoo said the review found that some workers in its supply chain had not always been properly compensated for their work, and that many workers were not fully aware of their rights and their obligations.
It said it recognised this was a widespread issue in the garment industry and committed to establishing and funding a Garment & Textiles Community Trust governed by independent trustees to address hardship.
Boohoo, which has grown into a company with a market value of more than £4 billion, acknowledged the need for change.
“This (review) has identified significant and clearly unacceptable issues in our supply chain and the steps we had taken to address them,” Boohoo CEO John Lyttle said.
“It is clear that we need to go further and faster in order to improve our governance, oversight and compliance.”
The company laid out six steps it was taking to improve governance, including appointing new independent directors to its board, making supply chain compliance a standing item at board meetings and the formation of two committees to oversee risks to the business and its supply chain compliance.
Two Labour MPs representing Leicester – Liz Kendall (Leicester West) and Jonathan Ashworth (Leicester South) – said in a joint statement, “Ministers must also take responsibility for their failure to implement the recommendations of numerous inquiries into worker exploitation and for slashing the budgets of the enforcement bodies that are supposed to keep workers safe.
“This report must be a turning point for action and we, as the local MPs for Leicester, will be holding the government and BooHoo to account for their response.”