Boohoo launches an independent review of its supply chain and cuts its relationship with two suppliers following exploitation claims

Boohoo said it would be investing 10 million ($12.5 million) "to eradicate supply chain malpractice" and had cut relationships with two of its suppliers that were connected to The Sunday Times' investigation.
The company said it would update investors on the findings of its supply chain review in September.
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British fast-fashion giant Boohoo announced early Wednesday morning that it is launching an independent review into its supply chain in the UK, following reports that workers at one of its suppliers' factories were being paid as little as 3.50 ($4.37) an hour.

The review will be led by the head of the Business Crime Group at Mishcon de Reya, Alison Levitt QC, it said, adding that it will invest 10 million ($12.5 million) "to eradicate supply chain malpractice."

This announcement comes after an explosive Sunday Times investigation this weekend in which a reporter went undercover at a factory in Leicester, which was supplying clothes for two of Boohoo's brands. The reporter found that staff were paid far less than the national minimum wage of 8.72 ($10.89) and were wearing almost no protective equipment despite COVID-19 rules.

Boohoo said earlier this week that these conditions were "totally unacceptable" and "fall woefully short" of its standards. On Wednesday, it said that its initial findings had shown some "inaccuracies" in the Sunday Times' report, in that the clothing photographed in this factory had not been manufactured in the UK but rather in Morocco and was being repackaged there.

"Investigations over the last 72 hours have highlighted that the order from Nasty Gal was placed with Revolution Clothing Co Limited, who then instructed Morefray Limited to manufacture in Morocco and repackage the garments on their behalf in Leicester," it said.

"Our investigation to date has not found evidence of suppliers paying workers 3.50 per hour. However we have found other evidence of non-compliance with our Code of Conduct and the Group has taken the decision to immediately terminate its relationship with both suppliers," it added.

The upcoming independent review of its supply chain will focus on ensuring that its suppliers' are compliant with minimum wage regulations, COVID-19 rules, and that workers have contacts of employment. Updates on its findings will be presented in September.

"As a board we are deeply shocked by the recent allegations about the Leicester garment industry. We wish to reiterate how seriously we are taking these matters and we will not hesitate to terminate any relationships where non-compliance with our Code of Conduct is found," CEO John Lyttle said in a statement on Wednesday.

He added: "Our commitment to an incremental 10 million of investment demonstrates our resolve to enforce the highest standards of ethics, compliance and transparency for the benefit of all garment workers. We look forward to regularly updating our stakeholders as we move through this process."

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