Boohoo cuts ties with sub-contracted suppliers

Digital fashion retailer Boohoo has ordered its key Leicester supply chain to end the sub-contracting of clothes-making, after the brand came under fire last year for poor working conditions and underpayments to workers.

Existing suppliers in the East Midlands town have been told told to either acquire existing sub-contractors or cut their ties with them.

Suppliers will therefore potentially be forced to take on more workers themselves and rent out or buy more space for production.

This would obviously increase their costs, but Boohoo has told them they only have until 5 March 2021 to make the changes.

The suppliers may well ask for more cash for their clothes as a result, but Boohoo has not publicly addressed that point, or whether it will result in higher prices on its websites.

The company has just acquired the Dorothy Perkins, Wallis and Burton brands from the bankrupt Arcadia group, and recently acquired the Debenhams brand too after its business failure - all the stores will be closed as the brands move exclusively online.

Last year, Boohoo brought in barrister Alison Levitt to investigate worker welfare during the pandemic, after it was reported that some clothes workers were being paid as little as £3.50 an hour to make clothes for Boohoo - well below the minimum wage.

Her September report was hard-hitting and said the firm had "capitalised on the commercial opportunities offered by lockdown" - through increased online orders - but had taken no responsibility for those making the clothes.

It also recommended that “within six months Boohoo should reduce its approved suppliers to a list that contains a manageable number of companies, ideally without reducing capacity”, and with “the goal of reducing and ultimately eliminating sub-contracting”.

The company has told suppliers its changes are “a mandatory requirement and not open to negotiation”.

In a statement on the changes, the company said: “Boohoo Group is committed to growing our business in a more sustainable and transparent manner.

“Working with suppliers in a more strategic and sustainable way is a key part of our partnership approach to improve transparency, efficiency and accountability.”

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