Boohoo ignored issues at factories, guilty of 'many failures', review finds

Boohoo’s senior directors knew “for a fact” that there were “serious issues” with the treatment of workers in the company’s Leicester factories since at last December, a review has concluded.

Lawyer Alison Levitt QC, who was hired by the company to review its practices following allegations of labour violations, said she found the reports of poor working conditions and low rates of pay at the garment factories to be “substantially true”.

However, Ms Levitt said she found no evidence that Boohoo or its officers committed any criminal offences.

"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.

The review follows reports over the summer about concerning working conditions in the company’s Leicester factories after the city entered a local coronavirus lockdown. 

An undercover investigation by The Sunday Times in July revealed that workers were being paid as little as £3.50 an hour.

The company was also accused of putting workers at risk by working with factories which continued to operate during lockdown without social distancing measures in place.

Retailers including Asos and Next went on to remove Boohoo products from their websites in light of the modern slavery allegations.

While Ms Levitt highlighted the company’s failure to respond quickly to serious issues with its supply chain, she also attributed a portion of the blame to the authorities.

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

The QC 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".

While lockdown brought new allegations about the company’s working practices to the fore, directors have long been made aware of questions regarding their supply chain.

In May 2018 the Financial Times published a story about "labour exploitation in Britain's garment industry" which asked how the company was able to sell its clothes at such low prices.

The investigation was followed by MPs questioning then co-chief executive Carol Kane about the retailer’s prices.

Boohoo chief executive John Lyttle responded by saying that the review “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." 

Mr Lyttle added: "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.”