Boohoo directors ‘knew of supply chain problems months before scandal’

Senior directors at Boohoo knew about “serious issues” over how workers were treated at its supply chain in Leicester months before reporting brought the issue to the fore, a review has found.

Lawyer Alison Levitt QC, who had been hired by the company to review its practices, said that whereas she found no evidence Boohoo had committed any crimes, staff at factories in Leicester had worked in poor conditions for low pay.

“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,” Ms Levitt said.

“Whilst it put in place a programme intended to remedy this, it did not move quickly enough,” she added.

However, directors were aware of questions over its supply chain much earlier after reporters and politicians raised the issue.

In May 2018 the Financial Times published a story about “labour exploitation in Britain’s garment industry” which questioned how Boohoo was able to sell dresses so cheaply.

Months later, in November 2018, MPs grilled then co-chief executive Carol Kane about the prices of its goods.

Ms Levitt was appointed to review the company’s supply chain after worries over Leicester’s garment factories resurfaced when the city was put under lock lockdown because of Covid-19.

The Sunday Times published a series of claims in July about conditions in Leicester factories during the local lockdown in the city.

Issues had also been highlighted as early as 2017 by Channel 4, and the BBC and the Guardian had both reported on problems in Leicester before the Sunday Times’s report.

Ms Levitt said that Boohoo “capitalised on the commercial opportunities offered by lockdown and believed that it was supporting Leicester factories by not cancelling orders, but took no responsibility for the consequences for those who made the clothes they sold”.

However, the QC also placed a part of the blame away from Boohoo.

She said: “Inaction by the authorities has contributed significantly to the deficiencies … If the law is not enforced, this sends a clear message that the violations are not important and the people affected do not matter.”

Boohoo chief executive John Lyttle said: “Ms Levitt’s Independent Review … 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.

“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.

“As a board, we recognise that we need to rebuild confidence that these matters will be dealt with appropriately and sensitively, and that they will not recur.”