Wednesday, July 28, 2021


Boohoo severs ties with hundreds of UK manufacturers after critical review

Boohoo has published a full list of the UK clothing manufacturers it works with after severing ties with hundreds of companies…

By admin , in Markets , at March 25, 2021 Tags:

Boohoo has published a full list of the UK clothing manufacturers it works with after severing ties with hundreds of companies following a damning review last year of its supply chain.

The group now works with 78 UK suppliers after the review by Alison Levitt QC found the fast fashion retailer had been working with up to 500 UK suppliers when subcontractors were included. The review concluded there were“endemic” problems at Leicester factories in its supply chain, including minimum wage and life-threatening fire risk.

Boohoo has now banned subcontracting by its main suppliers so some of the reduction in numbers is the result of outsourced work being brought in-house. However, the 78 approved manufacturers operate across just 100 sites.

Analysts at the investment firm Jefferies said the list represented a “sharp consolidation” that would help give the business better oversight of how its clothing was being made, which was “as an important step in re-establishing trust in the business”.

Boohoo said the reduction in suppliers would “strengthen oversight and ownership and provide greater protection to workers”.

Sir Brian Leveson, the retired judge who has been appointed by Boohoo to oversee the overhaul of its supply chain, said he thought Boohoo was making “very real progress” but added: “There is some way to go to ensure the changes put in place become business as usual.”

In his second progress report published on Thursday, Leveson praised better monitoring of factory staff, including fingerprint recognition systems, and new contracts that included overtime pay, but he flagged concerns about some factory workers being signed up to zero-hours contracts.

Leveson said Boohoo was exiting from factories that did not meet its new standards responsibly with existing contracts being honoured. Decisions were taken after most suppliers were subject to at least two independent audits over the past eight months.

Tim Godwin, a former deputy commissioner of the Metropolitan police, has also investigated the corporate structures of suppliers and interviewed those exercising significant control over their activity to weed out companies led by disqualified directors.

Leveson said Godwin’s work had been made difficult because of poor regulatory oversight of disqualified directors. He said records were in “a poor state and, at best, subject to little policing with the result that it is difficult to obtain absolute clarity as to the existence or otherwise of disqualification”.

Boohoo said it remained committed to UK manufacturing and now ordered a higher volume of goods from Leicester despite reducing supplier numbers.

John Lyttle, its chief executive, said: “We have faced up to the problems of the past and are now driving positive change in the industry. We 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 company is now attempting to avoid over-ordering from suppliers – which can lead to them outsourcing work to unchecked subcontractors – by using technology to advise buying teams when a supplier is reaching its capacity. The new system also only allows orders to be raised with approved suppliers who have a current audit on record.

Dominique Muller from the workers’ rights group Labour Behind the Label said: “Boohoo is making progress, but they are starting from a situation where they were 20 years behind established brands and are still not up to scratch.”

She said the company was yet to publish its list of overseas suppliers and pointed out that at least one of the factory auditing companies it was working with had already been in place last year when poor working practices were highlighted by Labour Behind the Label, the Guardian and other publications.

Muller said Boohoo had not made clear how it would make up for past exploitation. She said hundreds of workers from factories now deemed unsuitable by Boohoo did not appear to have been able to recoup pay they were owed, and it was unclear whether factories had been given time and help to improve before being cut off.

“It seems as though Boohoo has held off publishing this list until every factory is squeaky clean, but it doesn’t excuse past behaviour,” she said. “We want Boohoo to ensure it is part of a collaborative approach to improve conditions in Leicester as whatever it does will impact other brands.”

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