Boohoo publishes report on working conditions

Marco Green
September 28, 2020

The review considered whether the allegations about working conditions and low pay are well-founded, and if they are, consider the extent to which boohoo monitored its Leicester supply chain and had knowledge of the allegations, consider the Group's compliance with the relevant law, and make recommendations for the future.

Alison Levitt, a lawyer and former United Kingdom public prosecutor, led the review after reports of contractors that were paying less than minimum wage and skimping on safety precautions in Leicester amid a flareup of Covid-19 cases.

In an update to shareholders, Boohoo said that the review had identified "many failings" in the Leicester supply chain and recommended improvements to its related corporate governance, compliance and monitoring processes.

To the contrary, Boohoo had been taking various steps to fix supply chain issues since previous year, and the same measures were being implemented at Leicester.

Boohoo Group Plc's garment contractors had significant and unacceptable issues in labor conditions, according to an independent review of the United Kingdom fashion retailer's supply chain.

"They were a product of processes it had itself put in place and not just a reaction to the negative publicity in July and August 2020", it said. "It has already made a significant start on putting things right".

"Overall, we see the results of the review as being broadly in line with our expectations, and think the changes being called out represent further steps forward on the path to rebuilding investor confidence in Boohoo's social responsibility", JP Morgan analysts said.

Boohoo said the review found that some workers in its supply chain had not always been properly compensated for their work and that many workers were not fully aware of their rights and their obligations.

In a statement, John Lyttle, Boohoo's chief executive, said: "Today we publish Ms Levitt's Independent Review in full".

Boohoo said it acknowledged that the report had identified "significant and clearly unacceptable issues" within its supply chain and said it had chose to publish the report in full and to implement the recommendations made.

Purchasing practices will be overhauled, it added, with a new group director of responsible sourcing appointed, while the list of suppliers will be consolidated and a trust established to support workers' in Leicester.

"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".

Thirdly boohoo will seek to raising standards across its supply chain.

"But it is clear that we need to go further and faster to improve our governance, oversight and compliance, demonstrate best practice, and develop our suppliers' skills and capabilities in area".

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