Boohoo had ‘many failings’ in Leicester supply chain

Boohoo co-founders Carol Kane and Mahmud Kamani

Manchester-based online fashion giant Boohoo Group plc said on Friday the independent review of its UK supply chain led by Alison Levitt QC “identified many failings in the Leicester supply chain and recommended improvements to Boohoo’s related corporate governance, compliance and monitoring processes.”

Boohoo is moving to address concerns about working conditions and pay rates in factories that supply the firm.

Boohoo’s brands also include and Nasty Gal as well as Oasis, Warehouse, MissPap, Karen Millen and Coast.

Boohoo shares rose about 11% after publication of the report on Friday to give the AIM-listed firm a current stock market value of almost £4.5 billion.

Boohoo CEO John Lyttle said: “Today we publish Ms Levitt’s independent review in full.

“This has identified significant and clearly unacceptable issues in our supply chain, and the steps we had taken to address them, but it is clear that we need to go further and faster to improve our governance, oversight and compliance.

“As a result, the group is implementing necessary enhancements to its supplier audit and compliance procedures, and the board’s oversight of these matters will increase significantly.

“As a board, we recognise that we need to rebuild confidence that these matters will be dealt with appropriately and sensitively, and that they will not recur.

“Garment workers in Leicester, and our suppliers across the city, are an important part of our success. 

“We recognise that Boohoo has been a major force in driving the textile industry in Leicester and today want to reinforce our commitment to being a leader for positive change in the city, alongside workers, suppliers, local government, NGOs and the community at large.

“Today we are setting out the further steps we are taking to drive long-lasting and meaningful change that all stakeholders in the boohoo group will benefit from.”

Boohoo said of the QC’s report: “It goes on to state that there is ample evidence that the steps which Boohoo is now taking in relation to remedying problems in its Leicester supply chain had been implemented nearly a year ago.

“They were a product of processes it had itself put in place and not just a reaction to the negative publicity in July and August 2020.

“Nevertheless, with the benefit of hindsight we regret that these processes did not advance quickly enough.

“Ms Levitt is satisfied that boohoo did not deliberately allow poor conditions and low pay to exist within its supply chain, it did not intentionally profit from them and its business model is not founded on exploiting workers in Leicester. 

“In its conclusion, the report states that ‘if Boohoo is willing to take a different approach to how it both views and interacts with the Leicester supply chain, it has within its power to be a tremendous force for good.’

“In addition, Ms Levitt is ‘confident that the adaptations which Boohoo should make involve a relatively easily-achieved realignment of its priorities and governance systems and that the Board should not feel discouraged.

“It has already made a significant start on putting things right’.”