Boohoo probe uncovers ‘many failings’ in Leicester supply chain

The probe, which was launched earlier this year amid allegations of modern slavery, has recommended a series of improvements to Boohoo’s corporate governance, compliance and monitoring processes. 

The review, led by Alison Levitt QC, concluded 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”.

It said Boohoo could be “a tremendous force for good” if it took “a different approach to how it both views and interacts with the Leicester supply chain”. 

Levitt added that Boohoo has “already made a significant start on putting things right”.

Boohoo insisted moves aimed at “remedying problems in its Leicester supply chain had been implemented nearly a year ago”, prior to the backlash it received in the summer following revelations about workers’ pay in Leicester factories.

But the retailer added: “With the benefit of hindsight we regret that these processes did not advance quickly enough.

“The group recognises that in order to effect real change in the Leicester textile industry, further clear, strong and measurable actions are needed in addition to those that the group was undertaking.”

Boohoo has taken a series of steps to shore up its corporate governance and said it is “close” to appointing “a highly experienced and respected individual” to oversee its change agenda.

It has recently hired a new group director of responsible sourcing and plans to bring in two new non-executive directors, one of which will have a background in dealing with environmental, social and governance matters.

Boohoo said supply chain compliance will become “a mandatory item” at every board meeting “with immediate effect”.

The online fashion giant is also developing new purchasing principles for its buying teams, while those employees will also undergo “mandatory education and training” to ensure those principles are being implemented and to drive “better understanding of our supply chain”.

Bonuses will be paid to staff correctly adhering to the purchasing principles, while disciplinary action will be taken if orders are placed with unapproved suppliers.

Boohoo has also pledged to “raise standards” across its supply chain and will consolidate the number of businesses on its approved supplier list. It will, however, maintain “a significant presence” in the Leicester garment industry.

The etailer will invite new suppliers, with a track record of “ethical and sustainability policies”, to be included on its supplier list.

Boohoo also vowed to establish a Garment and Textiles Community Trust to support Leicester factory workers and will work “more closely with suppliers to ensure they are able to manage a more consistent and predictable flow of orders”.

It said it would “more clearly recognise and celebrate the contributions that garment workers make to our business” in the future.

Boohoo boss John Lyttle said Levitt’s review had “identified significant and clearly unacceptable issues in our supply chain”.

He said although steps were being taken to address them, “it is clear that we need to go further and faster to improve our governance, oversight and compliance”.

Lyttle added: “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.”