Boohoo launches supply chain review in response to malpractice allegations

Online fashion group Boohoo said today (8 July) it is launching an immediate independent review of its UK supply chain, following allegations of malpractice in UK warehouses manufacturing its garments.

The Boohoo, Pretty Little Thing and Nasty Gal owner, which has also acquired mid-market brands Coast, Karen Millen, Warehouse, and Oasis, said it was investing an incremental £10 million to eradicate supply chain malpractice.

The investigation will be led by Alison Levitt QC, and it comes after The Sunday Times alleged workers in a Leicester warehouse supplying Nasty Gal were being paid less than half the expected National Living Wage and made to work in unsuitable conditions.

Boohoo said on Monday it would “not hesitate to immediately terminate relationships with any supplier who is found not to be acting within both the letter and spirit of our supplier code of conduct”, although it suggested Jaswal Fashions – on which the allegations centre – is not a declared Boohoo supplier.

Since the reports emerged, Boohoo has conducted its own internal investigation and claimed there were inaccuracies in the report.

“The garments featured were not actually manufactured in Leicester, but in Morocco,” Boohoo claimed.

“Post production, the garments were shipped back to the UK by the supplier to be repackaged into compliant boxes for delivery to the group's international distribution centre in Burnley. This was the process that was filmed at a premises formerly operated by Jaswal Fashions.”

The group suggested the order from Nasty Gal highlighted in The Sunday Times report was placed with Revolution Clothing Co, which then instructed Morefray to manufacture in Morocco and repackage the garments on their behalf in Leicester. It said the investigation to date has not found evidence of suppliers paying workers £3.50 per hour.

“However we have found other evidence of non-compliance with our code of conduct and the group has taken the decision to immediately terminate its relationship with both suppliers,” the group added.

Ethical audit and compliance specialists, Verisio and Bureau Veritas, will now conduct a review focusing on supplier compliance with minimum wage and Covid-19 regulations, as well as working hours, record keeping, and right-to-work documentation.

John Lyttle, group CEO, said he and his fellow board members were “shocked” by the allegations relating to the Leicester garment industry.

“We wish to reiterate how seriously we are taking these matters and we will not hesitate to terminate any relationships where non-compliance with our code of conduct is found,” he remarked.

“Our commitment to an incremental £10 million of investment demonstrates our resolve to enforce the highest standards of ethics, compliance and transparency for the benefit of all garment workers. We look forward to regularly updating our stakeholders as we move through this process."

Boohoo also said it would welcome working with local officials in Leicester to help eradicate labour malpractice in Leicester. It cautioned that the poor standards of a few are tarnishing the name of other good suppliers in the city, and reiterated its desire to continue manufacturing in the UK.

Asos, Next, and Zalando have opted to delist Boohoo products from their websites following the recent allegations. Boohoo said today that wholesale has represented 1.4% of sales in the four months of its financial year to date, and was less than 4% of total sales in the 2019-20 full-year period.