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A “deep-dive” of the entire supply chain in terms of both of legal and ethical compliance would investigate the entire supply chain whether directly contracted to boohoo or sub-contracted by a supplier |
UK fast-fashion retailer Boohoo has said it is continuing its investigation into some suppliers, having already removed 64 as part of its new “deep-dive” initiative, following a supply chain probe related to working conditions and low pay.
The group, in its first report under its new Agenda for Change programme, said it was looking at alternative “ethical” partners as it moves to repair its reputation following the scandal last year.
The report is written by retired judge Sir Brian Leveson, which Boohoo appointed in November, and directed to the board, but made public in a bid to grow the company’s efforts to become more transparent.
Leveson said a “deep-dive” of the entire supply chain, in terms of both of legal and ethical compliance, would investigate the entire supply chain whether directly contracted to Boohoo or sub-contracted by a supplier with the help of enquiry and enforcement specialists including auditors; determine whether all such suppliers are compliant with their legal obligations and ethical good practice, and make recommendations to be implemented alongside the change programme.
Boohoo found itself headlining media in July as reports surfaced of one of its Leicester factories paying staff just GBP3.50 (US$4.38) an hour to work in unsafe conditions and in breach of UK coronavirus lockdowns.
The retailer vowed to cut ties with factories that breached its supplier code of conduct but a number of retailers including Next started to drop the group’s brands from their websites.
Boohoo then launched an independent review into its supply chain which was conducted by senior barrister Alison Levitt QC. The review identified “many failings” but determined the online fast-fashion retailer’s business model is not founded on exploiting workers in Leicester.
Under the Agenda for Change programme, Boohoo not only aims to instill best practice at its Leicester suppliers but extends that ambition to reappraising its entire business model across the UK and elsewhere, focused on setting a new industry-wide standard for ethical supply chains.
Leveson said while it is “early days” for the programme, several changes have already been enacted including the appointment of supply chain and compliance audit firms Verisio and Bureau Veritas, along with enquiry and enforcement specialists headed by former Deputy Commissioner of the Metropolitan Police Tim Godwin OBE to work together on ‘deep dive’ independent enquiries into and ethical audits of suppliers and sub-contractors; the appointment of a new group director of responsible sourcing and group product operations along with a team concerned with ethical compliance, and the acquisition and development of a new factory in Leicester – to become a centre of excellence for ethical and compliant practices and a hub for community outreach and the Boohoo academy.
The full list of actions to implement Levitt’s recommendations can be found here but certain areas remain a “work in progress” said Leveson, if the group is to create and establish a critical ‘hearts and mind’ programme involving everyone in the buying chain. These are to:
- consolidate the approved supplier list and invite suppliers with a track record of ethical and sustainability policies;
- complete the process of auditing all tier one and two UK suppliers and publish the list in full;
- continue pursuing the independent audit programme throughout the rest of the UK and global supply chain;
- establish an electronic audit programme to monitor status and capacity across the supply chain
- support and work more closely with suppliers and agree KPIs to drive improvement throughout the supplier base;
- establish and fund a Garment and Textiles Community Trust, governed by independent trustees
“The programme is underway and real enthusiasm has been demonstrated by those at the centre of the A4C project along with a determination to achieve real change. All that is to be commended but it is clear that there is a long way to go. Working with buyers to ensure that there is an auditable process of ensuring that a ‘fair trade’ approach has been adopted to purchasing negotiations has to run alongside a thorough and complete compliance audit not only of all those with whom Boohoo contracts but also their sub-contractors,” said Leveson.
“The challenges presented by all that has emerged cannot be solved by Boohoo alone but Boohoo must be prepared to stand alongside all efforts to ensure that fair practices are adopted by all those in its supply chain throughout the country. It is worth repeating that, in that way, it can be a leader for positive change in the city [of Leicester] with the same being achieved for all sourcing from overseas to help on the group’s journey to lead the fashion e-commerce market globally in a transparent manner. This will not be the work of a few months but will require continued sustained effort for a considerable period of
time. What can be said now, however, is that Boohoo has enthusiastically started the journey and is travelling along the right road,” said Leveson.
Earlier today Boohoo raised its annual revenue target following strong Christmas trading.
The owner of the PrettyLittleThing, Nasty Gal and MissPap, expects revenue growth of 36% to 38% for the financial year ending 28 Feb above the already upgraded forecast of 28%-32%.
For the four months to 31 December, group total revenue jumped by 40% to GBP660.8bn.
