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Boohoo independent review finds ‘many failings’ in UK supply chain

By Huw Hughes

Sep 25, 2020

Boohoo has said “many failings” have been found in its UK supply chain after the completion of an independent review launched in July following claims of poor working conditions.

In July, an undercover investigation by The Sunday Times alleged that some of the Leicester factories supplying clothing to Boohoo were paying workers just 3.50 pounds per hour and forcing some to work while sick. Boohoo denied claims of illegal wages.

Boohoo launched an independent review of its UK supply chain the same month, led by Alison Levitt QC.

The company, whose portfolio includes brands Pretty Little Thing and Nasty Gal, said Friday the review “has identified many failings in the Leicester supply chain and recommended improvements to Boohoo's related corporate governance, compliance and monitoring processes”.

The review found that from “(at the very latest) December 2019, senior Boohoo directors knew for a fact that there were very serious issues about the treatment of factory workers in Leicester” and “whilst it put in place a programme intended to remedy this, it did not move quickly enough.”

It also said “Boohoo ought to have appreciated the serious risks created by ‘lockdown’ in relation to potential exploitation of the workforce of the Leicester factories”.

However, Levitt was satisfied that the company “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”.

Boohoo launches Supply Chain Compliance Committee

The review found “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” and were not “just a reaction to the negative publicity in July and August 2020”.

The company has set out six steps to enhance its supplier audit and compliance procedures going forward, one of which being the bolstering of its corporate governance through the appointment of new independent directors, and the launch of a Supply Chain Compliance Committee.

“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,” group CEO John Lyttle said in a statement.

“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.”

Photo credit: Boohoo