Boohoo launches independent review of supply chain, pledges £10m to tackle malpractice

ONLINE fashion retailer Boohoo has commissioned an independent review of its supply chain in Britain after a damaging media report on working conditions at a factory in Leicester.

Shares in Boohoo have lost about a third of their value since The Sunday Times said workers in the factory making clothes destined for Boohoo were being paid as little as £3.50 an hour.

The report also noted that the manufacturing unit, which displayed the sign Jaswal Fashions, had been operating last week during a local coronavirus lockdown in Leicester, without additional hygiene or social distancing measures in place.

Boohoo said the the reported conditions at Jaswal Fashions were "totally unacceptable and fall woefully short of any standards acceptable in any workplace".

The company promised "immediate action to thoroughly investigate how our garments were in their hands", adding that it would "urgently review our relationship with any suppliers who have subcontracted work to the manufacturer in question".

"We are deeply shocked by the recent allegations about the Leicester garment industry," CEO John Lyttle said on Wednesday (8) after announcing the review.

The review is being led by senior lawyer Alison Levitt with the board represented by Brian Small, senior independent director of Boohoo, which sells own-brand clothing, shoes and accessories targeted at 16 to 40-year-olds.

It will focus on supplier compliance with minimum wage regulations, compliance with Covid-19 regulations, working hours and record keeping and right to work documentation and contracts of employment, Boohoo said.

The company added that it was also accelerating its independent third-party supply chain review with ethical audit and compliance specialists, Verisio and Bureau Veritas, and would invest £10 million to "eradicate supply chain malpractice".

"We take extremely seriously all allegations of malpractice, poor working conditions, and underpayment of workers," it said.

"The group will not tolerate any incidence of non-compliance with its Code of Conduct or any mistreatment of workers, and will not hesitate to terminate relationships with any supplier who does not comply."

Boohoo has grown rapidly since it was founded by Mahmud Kamani and Carol Kane in Manchester in 2006 and at Friday's market close its market value was nearly £5 billion, more than double that of Marks & Spencer, Britain's largest clothing retailer by sales value.

The company said it would also welcome the opportunity to work with Home Secretary Priti Patel and local officials on any future investigations to help tackle labour malpractice in Leicester.