Pressure on Boohoo after newspaper exposé of "undeclared" supplier

By

Sandra Halliday

Published
Jul 6, 2020

Boohoo Group has been forced to take action and defend itself again after a major newspaper exposé said a sub-contracted garment factory accused of illegal practices was making some of its products.

Following the local Leicester lockdown and news last week that garment factories could have been flouting social distancing rules, it had already defended its supplier practices and insisted it wouldn’t tolerate any rule-breaking. But yesterday, The Sunday Times published a report saying an “undeclared” supplier was “making garments for the fashion retailer while allegedly paying staff as little as £3.50 an hour and flouting social distancing rules". 

Boohoo reportedly accounts for around three-quarters of garment production in Leicester.

An undercover Sunday Times reporter took secret video of himself packing clothes for Boohoo’s Nasty Gal label at a company calling itself Jaswal Fashions. While there, he was paid £3.50 an hour, well below the minimum wage of £8.72 for workers aged 25 and over.

On Monday, the company said that it “remains committed to supporting UK manufacturing and is determined to drive up standards. We will not hesitate to immediately terminate relationships with any supplier who is found not to be acting within both the letter and spirit of our supplier code of conduct. This includes very clear expectations on transparency about second-tier suppliers.”

It also said it was “grateful to The Sunday Times for highlighting the conditions at Jaswal Fashions, which, if as observed and reported by the undercover reporter, are totally unacceptable and fall woefully short of any standards acceptable in any workplace”.

But there appears to be a level of confusion over its supply chain and exactly which companies are making its goods. The statement said Jaswal Fashions is not a declared supplier but is also no longer trading as a garment manufacturer. It means “a different company is using Jaswal's former premises and we are currently trying to establish the identity of this company. We are taking immediate action to thoroughly investigate how our garments were in their hands, will ensure that our suppliers immediately cease working with this company, and we will urgently review our relationship with any suppliers who have sub-contracted work to the manufacturer in question.”

Campaign group Labour Behind the Label had kicked off negative reports last week in a study claiming staff at Leicester garment factories were under pressure to work in an unsafe environment. It also claimed Boohoo had emailed suppliers stressing the importance of health and safety guidelines but also urging them to deliver orders on time.

The issues highlight the problems for companies whose business model is about ultra-fast local production at low prices, and how undeclared sub-contracted suppliers can potentially undermine good intentions on the part of those companies. 

Boohoo said it wants to work with local officials to raise standards “because we are absolutely committed to eradicating any instance of non-compliance and to ensuring that the actions of a few do not continue to undermine the excellent work of many of our suppliers in the area, who provide good jobs and good working conditions”.

The company insisted that it has been taking action to boost the transparency of its supply chain and its general practices, including having appointed its first Sustainability Director last year; introducing 14-day payment terms for its UK manufacturers; retaining an independent third-party compliance organisation to strengthen its compliance and auditing programme; and this year launching a review of all tier-one and tier-two UK suppliers, which includes "a full audit of all of its suppliers' manufacturing facilities".