Online fashion retailer Boohoo is facing criticism over its handling of the treatment of workers within the company’s Leicester supply chain.
The review, led by Alison Levitt QC, was commissioned by the company in July after media allegations of sweatshop conditions at third-party suppliers during the coronavirus pandemic prompted a dramatic plunge in its share price.
The claims, which first surfaced in 2017, came to a head when The Sunday Times alleged that workers at a Boohoo supplier in the city were being paid as little as £3.50 an hour – well below the minimum wage – during Leicester’s local lockdown.
Sky News has been told that up to 10,000 people could be victims of modern slavery in the city’s wider textile industry, which serves clothing brands globally.
Ms Levitt said her inquiry for Boohoo found no evidence the firm had committed any crimes, but concluded staff at factories in Leicester had worked in poor conditions for low pay and that Boohoo had “capitalised on the commercial opportunities” offered by the COVID-19 restriction.
She found that Boohoo “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”.
Her report stated: “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.”
“Whilst it put in place a programme intended to remedy this, it did not move quickly enough,” she added.
She also pointed to inaction by the authorities on enforcement of the law.
Boohoo shares, which have steadily recovered ground since the July slump, rose by up to 20% after the publication of the report.
Chief executive John Lyttle responded: “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.”