Boohoo launches independent review of its UK supply chain after high street brands ditch retailer
Boohoo launches independent review of its UK supply chain after Asos, Next and Zalando ditch retailer plunging its value by £1bn in wake of Leicester factory scandal
- Probe will be led by Alison Levitt QC after claims of poor conditions in chain
- Value of Boohoo has dropped after shop chains ditched it over allegations
- Firm also pledged to speed up its independent third party supply chain review
Published: 03:26 EDT, 8 July 2020 | Updated: 06:17 EDT, 8 July 2020
Under fire fashion retailer Boohoo has launched an independent review of its supply chain after a scandal about working conditions at factories.
The investigation will be led by top lawyer Alison Levitt QC and comes after the company’s shares plummeted £1billion amid the claims of poor pay and practices.
Ms Levitt was formerly legal advisor to the director of public prosecutions who led the 2013 internal review which criticised the decision not to prosecute Jimmy Savile for sex offences.
Boohoo said it was going to invest £10million to try and tackle the problem as well as speed up its independent third party supply chain review with ethical audit and compliance specialists.
Factory workers at Faiza Fashion in Leicester – where Boohoo and PLT clothing is allegedly made
Boohoo clothes had been hugely popular, but the scandal saw share prices tumble
A statement from the firm said: ‘We take extremely seriously all allegations of malpractice, poor working conditions, and underpayment of workers.
‘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.’
It came after three major online retailers dropped the brand over the claims of low pay and unsafe conditions at a supplier’s factories.
Love Islands Steph Lamb and Ellie Brown at The Boo Hoo Man Tracksuit Party at Rosso Restaurant in Manchester last year
Call the fashion police: Probe lawyer is CPS ace
Boohoo investigator Alison Levitt QC
The lawyer in charge of the Boohoo investigation was once the top legal adviser to current Labour leader Keir Starmer.
At one point she was even tipped to succeed him in his former role as Director of Public Prosecutions, but missed out on the job.
She married Lord Carlisle in 2007 after he had left his wife for her.
Ms Levitt has not been shy about criticising the Crown Prosecution Service and was headhunted to her subsequent role with Mishcon de Reya.
She said in 2015 some CPS staff had a problem with making the right charging decisions.
Ms Levitt told the BBC: ‘Some of them were just fantastic, and some of them were just wrong – and they were wrong in quite fundamental respects.
‘The lawyers who are making them, plainly either did not understand what they were meant to be doing or were not applying what it was they did understand.’
Next ditched Boohoo clothes from its websites last week, while Asos and Zalando followed suit on Tuesday.
The fallout came after a Sunday Times report claiming workers at a Leicester factory were paid £3.50 an hour.
Their probe also claimed they were still making clothes while being offered no protection from coronavirus.
A second factory which supplies Boohoo was also uncovered, where workers claimed to be paid less than half the £8.72 minimum wage. One, aged 39, said he was paid just £4 an hour
Home Secretary Priti Patel called the allegations ‘truly appalling’ and vowed to clamp down on modern slavery.
The National Crime Agency is investigating the city’s garment industry and has visited premises to investigate ‘concerns of modern slavery and human trafficking’.
The company, which also owns the Nasty Gal and PrettyLittleThing brands, has denied any responsibility but said it would “thoroughly investigate” the claims.
It was already under fire after claims from pressure group Labour Behind the Label, a workers’ rights group, that some sick employees at factories were “being forced to come into work while sick with Covid-19”.
A spokesman for Next said the fashion giant stopped selling items from Boohoo brands last week after the campaign group first raised their concerns with the production line.
The spokesman said: ‘Next concluded there is a case for Boohoo Group to answer.
‘Next needs to prove to itself the two Boohoo Group labels that it was stocking are being sourced in a manner that is appropriate and acceptable to Next.
‘Next therefore has its own investigation under way to ascertain whether they are being made in a way that Next does not approve of.’
Boohoo sells its products through a variety of third-party sites, although it is understood that wholesale revenues represent a small fraction of sales.
Jayde Pierce at the Boohoo spring collection at Dream Hollywood in March, 2018
An advert for Boohoo who have come under fire over allegations over poor treatment at factories
The Indian-born billionaire and his playboy son who began the Boohoo fast fashion brand from a Manchester market stall
Mahmud Kamani, pictured right, alongside his son, didn’t want to spoil his children, but helped them set up Pretty Little Thing
Mahmud Kamani, 55, started out running a Manchester market stall and launched Boohoo in 2006, now worth £2.6 billion, with his son Adam on board.
Mahmud’s other son Umar, 32, is CEO of clothes retailer PrettyLittleThing, which his father’s Boohoo Group bought a 34 per cent stake in for £269.8 million in May.
The billionaire clothes retailer’s own father Abdullah Kamani went to school in Gujurat, India. He moved the family to Kenya, where many Indian families had prospered in the British Empire.
Mahmud was born there in 1964, but four years later the Kamanis were forced to flee to Britain by increasing unrest and draconian employment laws that favoured native Kenyans.
They settled in Manchester, where the entrepreneurial Abdullah sold handbags on a market stall to feed his family, before investing in property and founding the wholesale textile business Pinstripe, where Mahmud worked, using family connections in India to source garments.
By the early 2000s, the firm was selling nearly £50 million of clothing a year to High Street names such as New Look, Primark and Philip Green’s Topshop.
Today it has a workforce of over 1,000, and celebrity advocates including everyone from Little Mix to Tallia Storm.
The Manchester-based company’s recent strategy focused on acquiring new online brands and platforms.
It said on Monday that it will end relationships with any supplier it finds to have broken its code of conduct.
It is understood that Asos has temporarily suspended its trading relationship with Boohoo brands until the group has completed its investigations and is able to provide assurances over its supply chain.
Berlin-based Zalando said it delisted around 300 products made by Boohoo Group on Tuesday.
A spokeswoman for the company said: ‘During the coronavirus crisis, the health and safety of our employees has remained of utmost importance to Zalando.
‘We adjusted to this ‘new normal’ with strict preventative measures to keep all employees safe while staying open for business.
‘We expect our partners to apply similar fundamental priorities and will distance ourselves from those who don’t.’
Yesterday social media influencers also moved to distance themselves from the firm.
Former TOWIE star Vas Moran said on Instagram: ‘Having worked with and supported Boohoo both professionally and personally for so many years, I am sure you can understand my sadness when reading these articles this morning.
‘There is no ”modern day” twist on this; Slavery is slavery and my heart hurts for the families that have suffered at the hands of companies that fail to do due diligence like this.
‘Companies that make billions off the back of hard working people trying to feed their family.’
After the scandal broke Boohoo moved quickly to say that they wanted to make sure all its suppliers followed a good standard.
A management statement said: ‘As a board, we are shocked and appalled by the recent allegations that have been made and we are committed to doing everything in our power to rebuild the reputation of the textile manufacturing industry in Leicester.
‘We want to ensure that the actions of a few do not continue to undermine the excellent work of many suppliers in the area, who succeed in providing good jobs and good working conditions.
‘We take extremely seriously all allegations of malpractice, poor working conditions, and underpayment of workers.
‘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.’
