Retail

Boohoo says fast-fashion retailer was victim of own rapid growth


Fast-fashion retailer Boohoo has stopped working with 64 suppliers in Leicester after concerns over abuses of labour law, its executives told a parliamentary hearing.

“We have done a consolidation exercise,” said Andrew Reaney, who joined the company as responsible sourcing and product operations director in September.

“The businesses we’ve exited displayed a consistent lack of transparency.”

Mr Reaney, along with Mahmud Kamani, Boohoo’s co-founder and executive chairman, and Kelly Byrne, commercial director of subsidiary Nasty Gal, were questioned on Wednesday by parliament’s environmental audit committee three months after an independent report found widespread evidence of abuses of labour law in the group’s supply chain.

He added that Verisio, one of two compliance auditors retained by the company, had conducted over 400 audits and that Boohoo was “actively encouraging whistleblowing” by workers who felt they were being mistreated.

Asked how many of the suppliers had been terminated because of violations of minimum wage laws, Mr Reaney would say only that “we found violations of the Boohoo code of conduct that were serious enough to warrant terminating our relationship with those companies”. He acknowledged that minimum-wage compliance was part of that code.

Mr Kamani repeatedly stressed that the company had been a victim of its own rapid growth — sales have gone from £195m to £1.2bn over the past five years.

“We have made some mistakes but over the past 14 years we’ve done more right than wrong,” he said. “Our business has been growing between 50 and 100 [per cent] a year at the top line level and processes do fall away . . . what we are guilty of is not putting processes in fast enough”.

He also defended a recent Black Friday “99 per cent off” promotion that saw clothing and accessories sold for literally pennies, describing it as “a marketing tactic”.

Ms Byrne added: “Anyone who knows anything about the garment industry would know that’s a loss leader and represented only a tiny part of turnover for that day.”

She also said that it gave people on lower incomes who had suffered during the Covid-19 pandemic the opportunity to buy a new wardrobe.

Following the publication of Alison Levitt’s report in September, the company has committed itself to publishing a list of its main suppliers and constructing its own factory in Leicester. It has also appointed Brian Leveson, another senior lawyer, to oversee an “agenda for change”.

Mr Kamani also advocated regulatory oversight of factories in Leicester but denied that the way that retailers buy garments should also be subject to oversight. “No. That’s a commercial decision for buyer and seller. They have to agree.”

Questioned on the company’s alleged antipathy to unions, he said: “I do not wish to meet them [Usdaw, the shop workers’ union] because I do not want to join a union, but they are free to campaign outside the warehouse.”

He added that the company remained committed to manufacturing in the UK. “It would be very easy for us to take this production outside of Leicester but we are still here. Sometimes it feels like we are getting punished for it.”



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