Boohoo cuts ties with over 400 suppliers

posted by Charlie Hart
25 March 2021

Boohoo has cut the number of suppliers it works with in Leicester by over 400 to 78 following concerns over its supply chain practices.

Boohoo said it had “ceased 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”. 

The retailer added approved suppliers on its list would continue to have their operations and standards monitored including “checks on working conditions and overall compliance with the group’s supplier code of conduct”.

The company said it was “committed to strengthening its internal purchasing practices”, with Boohoo’s buying and merchandising teams actively involved in responsible purchasing practices. 

“New ways of working and tech solutions ensure that orders can only be raised with approved suppliers who have a current audit on record. Our teams also have increased visibility of the capacity of every supplier and exactly what is being produced in the UK and overseas, which ensures that orders are not placed with suppliers who are reaching capacity.”

John Lyttle, CEO at Boohoo, said: “This is not the end of a project for us at Boohoo but the beginning of a new way of working with our suppliers. We have faced up to the problems of the past and are now driving positive change in the industry. 

“We want to play our part in rebuilding a vibrant manufacturing base in Leicester, one that offers good employment and great prospects for the workers and the industry in Leicester as a whole.” 

The online retailer said that by publishing its list of 78 approved UK suppliers, it was meeting one of the key recommendations in a report by Alison Levitt QC

In her report Levitt expressed concern that Boohoo had “something in the region of 500 companies in its supply chain in Leicester alone”, adding it “cannot possibly monitor conditions in such a large number of companies”.

Earlier this year Boohoo’s Leicester suppliers were ordered to “bring all finished goods manufacturing in-house” by 5 March.

Sir Brian Leveson, who was appointed in November 2020 to oversee Boohoo’s supply chain overhaul, said the removal of suppliers was being “undertaken responsibly”.

“Existing contracts are being honoured but no new orders can be placed other than with a supplier who has been approved by the process,” he said.

In his second report on the retailer’s progress, Leveson praised the steps taken by Boohoo and “the determination of all those involved to address the failings for which Boohoo has been criticised”.

He said Boohoo’s approved suppliers had already implemented better monitoring of staff including “biometric verification systems including biometric clock machines, facial recognition or fingerprints”.

He also added that as a result of approved suppliers bringing production in-house, staff were being recruited on contracts including holiday entitlement, sick pay, and pension contributions.

“However, it has been suggested that there may be some ‘zero hour’ contracts. It is not difficult to see how that such contracts might give rise to issues concerning the treatment of such workers not least because of the risk to collateral benefits. This is a matter which Boohoo should examine and address with real urgency,” he warned.

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