Online retailer Boohoo to cut more than 400 suppliers

Move comes after critical report into labour practices at some clothes manufacturers

Boohoo is cutting suppliers due to concerns over employee working conditions.

Online fashion retailer Boohoo – which recently acquired Dorothy Perkins, Wallis and Burton as part of the break-up of Philip Green’s Arcadia group – is to cut more than 400 companies from its supplier network following a critical report last year on labour practices at some of those businesses.

The fast-growing retailer has published a list of 78 approved manufacturers operating across 100 sites in Britain.

That marks a dramatic reduction from an estimated 500 suppliers identified in an independent review of the business by UK lawyer Alison Levitt last year.

The action follows the termination of at least 64 factories that couldn’t meet new enhanced labour standards, the consolidation of some suppliers and the elimination of subcontracting.

Significant move

The move is significant for Boohoo, which also owns the Nasty Gal and PrettyLittleThing brands. 

Improving transparency and control over the company’s supply chain was a key recommendation in Ms Levitt’s report, which followed a minimum-wage and safety scandal at supplier factories in Leicester in England last year.

In her review, Ms Levitt found that Boohoo had prioritised profit and growth, and ignored “red flags” about labour violations, but cleared the company of any direct involvement. 

Management has since taken a number of steps to improve its processes and governance, notably appointing UK Judge Brian Leveson to supervise the company’s “Agenda for Change” reform process.

“The group has 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,” 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,” said CEO John Lyttle.

We have faced up to the problems of the past and are now driving positive change in the industry.

Boohoo is carrying out a similar review of its international supply chain and plans to publish an approved manufacturers list by September.

Andrew Reaney, responsible sourcing director and head of ethical compliance at Boohoo, said the overhaul of the Leicester supplier network will “categorically not” impact Boohoo’s margins or the competitive pricing of the products it sells.

- Bloomberg and Reuters