Boohoo sales spiked in run-up to Christmas despite poor working practices concern

Sales at Boohoo jumped 40% in the run-up to Christmas as shoppers shrugged off the association of the online company with poor working conditions in clothing factories in the UK and overseas.

The bumper sales came as Sir Brian Leveson, the retired judge overseeing a clean-up of the retailer’s supply chain, said the process had a “long way to go”.

Boohoo, which owns nine fashion brands including Pretty Little Thing and Karen Millen, said it had enjoyed growth “across all brands and geographies”. Overall sales increased by 40% to £661m in the four months to 31 December.

John Lyttle, Boohoo’s chief executive, said the firm had expanded its share in all its markets, with the strong Christmas figures leading it to increase its top estimate of full-year growth to 38%, up from a previous estimate of 32%.

Boohoo’s UK sales matched the overall growth figure, but its performance in the US was stronger; sales were up 51%. Like its rival Asos, the company is benefiting from the growth of online shopping during the Covid-19 pandemic, which has forced high-street stores to close.

With the break-up of Sir Philip Green’s Arcadia group signalling the end of an era for the high street, Boohoo has emerged as a new force, having recently rescued the Oasis and Warehouse brands. To handle the big increase in sales, the company will this April open a new UK warehouse in Wellingborough that will create 1,000 jobs.

However, Boohoo’s success has been overshadowed by concerns about worker abuse in some of the factories used by its suppliers.

Last year an investigation by the Guardian found that factories in Leicester making the company’s clothes were failing to pay workers the minimum wage and were putting the health of staff at risk during lockdown.

Leveson, who led the inquiry into the activities of the media, was drafted in following a damning independent review, which found that media reports of poor conditions in the company’s supply chain were “substantially true”.

To remedy the situation, Boohoo has embarked on an “agenda for change” programme which, among other things, promises to overhaul its use of garment manufacturing in the UK. It hired Leveson to “bring transparency and independence to the process”, which involves other independent organisations, including ethical audit and compliance specialists.

The first of Leveson’s updates was published by the company alongside today’s numbers.

Leveson said the overhaul had begun and reported a “determination to achieve real change”. However, he wrote: “All that is to be commended, but it is clear that there is a long way to go.”

Boohoo’s sales figures were “enviable” in the face of disruption caused by Covid, said Emily Salter, a GlobalData analyst, who said the involvement of outside experts had bolstered the credibility of the firm’s supply chain revamp.

She said: “Even though some of the group’s actions are still controversial, such as PrettyLittleThing selling clothing items for less than £1 on Black Friday, these changes will help set a standard of greater transparency among fast-fashion brands, boosting investor and consumer confidence.”


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