Boohoo has ‘many failings’ in its supply chain, review finds

Fashion retailer Boohoo has “many failings” in its supply chain but has demonstrated it is taking steps to remedy the problem, an independent review commissioned by the company has found.

The investigation, which was led by lawyer Alison Levitt, came in response to allegations that factories making its clothes were paying workers less than the minimum wage. Boohoo has denied illegal wages among its suppliers.

The review, published on Friday, examined compliance with rules on wages and working practices among the chain’s suppliers during the pandemic and concluded that if Boohoo changed “how it both views and interacts with the Leicester supply chain, it has within its power to be a tremendous force for good”.

In response, Boohoo plans to add two non-executive directors to strengthen its board and give independent directors a majority on its board, it said. It will also appoint an independent person to provide oversight of how it is implementing the changes.

Ms Levitt, a former legal adviser to the Crown Prosecution Service, said she was “confident” the changes Boohoo was willing to make involved a “relatively easily achieved realignment of its priorities and governance systems”.

She also said she was satisfied that Boohoo did not deliberately allow poor conditions and low pay within its supply chain, did not intentionally profit from them and its business model was not founded on exploiting workers in Leicester.

“There is ample evidence that the steps which Boohoo is now taking in relation to remedying problems in its Leicester supply chain had been implemented nearly a year ago,” the group said of the review.

“Nevertheless, with the benefit of hindsight we regret that these processes did not advance quickly enough.”

The 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,” said John Lyttle, chief executive.

“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.”