The British online fast fashion retailer Boohoo has slashed its domestic supplier network to 78 firms from around 500 as it tries to rebuild its reputation after allegations of poor conditions for workers.
The firm acted after an independent review found “endemic” failings at factories making its products in Leicester, England. Media stories said workers were underpaid and working in unsafe conditions, allegations which were confirmed in the report.
Of the 78 suppliers across 100 factories, 68 manufacture apparel, nine are homewares producers and one makes beauty products.
The company said the shake-up reflected its commitment to “greater transparency” after the review by barrister Alison Levitt said it had “capitalised on the commercial opportunities offered by lockdown” but took no responsibility for the impact on people making its garments.
Boohoo said it stopped doing business with a number of manufacturers who were “unable to demonstrate the high standard of transparency required, despite being provided with opportunities to address any issues identified in the auditing process.”
Unapproved subcontracting has also been halted and the company launched a new sustainability strategy for the manufacture of clothes, terms for suppliers and reducing its carbon footprint. The group will provide a further update on its sustainability strategy at full-year results on May 5 and said it intends to publish its global supplier list by Sept. 25.
Russ Mould, investment director at AJ Bell, said while Boohoo was “upping its game” it was “by no means a perfect business following these actions.”
“There is still the fundamental issue that its business model facilitates waste – low pricing points means customers often buy a dress, wear it once and then chuck it.”
Mould added that the possibility of a U.S. import ban also relating to labor conditions in the supply chain “remains a live risk.”
Retail analysts at Jefferies said: “We see today’s publication of a fully audited U.K. supplier list as an important step in re-establishing trust in the business and momentum in the shares.”
Boohoo’s list of British suppliers can be found at: https://www.boohooplc.com/sites/boohoo-corp/files/uk-manufacturer-list.pdf.