boohoo supply chain report published as revenues rise
Posted on January 14, 2021 by Jonathan Symcox
The first report into the changing working practices of boohoo has been published by Sir Brian Leveson PC as the listed eCommerce giant posts a 40% jump in group revenue.
Following an independent review of boohoo’s UK supply chain by Alison Levitt QC late last year, the Manchester-headquartered group set out an ‘Agenda for Change’ programme to improve corporate governance, purchasing practices and supply chain standards.
The review was ordered following a Sunday Times investigation which revealed poor conditions at a factory in Leicester and led to several leading retailers dropping its clothes. The change programme has also pledged to support the rights of workers in the Midlands city.
Leveson is part of an ‘Agenda for Change’ committee which includes senior members of boohoo and KPMG.
The retired judge’s report found that 64 suppliers have been removed from the group’s UK supplier list, with further investigations ongoing, while alternative ethical suppliers are being identified.
It said progress is being made on the mapping and auditing of the group’s tier one and tier two supply base, in the UK and internationally, led by teams from Bureau Veritas and Verisio.
Leveson acknowledged the pace with which boohoo is effecting change, while noting that recommendations remain work in progress.
“The programme is underway and real enthusiasm has been demonstrated by those at the centre of the A4C project along with a determination to achieve real change,” he wrote.
“All that is to be commended, but it is clear that there is a long way to go. Working with buyers to ensure that there is an auditable process of ensuring that a ‘fair trade’ approach has been adopted to purchasing negotiations has to run alongside a thorough and complete compliance audit not only of all those with whom boohoo contracts but also their sub-contractors.
“The challenges presented by all that has emerged cannot be solved by boohoo alone but boohoo must be prepared to stand alongside all efforts to ensure that fair practices are adopted by all those in its supply chain throughout the country.”
boohoo promised to appoint two independent non-executive directors following the Levitt review. It has only secured one of these to date: Trainline CFO Shaun McCabe, who now chairs the audit committee.
Mahmud Kamani, group executive chairman, commented: “I’m immensely proud of the speed with which our team has worked to effect change during such a challenging period for the group, and it’s encouraging to see our progress acknowledged in the report.
“I’d like to take this opportunity to thank our team for their exceptional hard work over the last few months, and to reinforce our commitment to being a leader for positive change in UK textiles manufacturing.
“We have lots to do still, but an exciting year lies ahead for boohoo and our multi-brand platform in 2021.”
The group saw strong revenue growth of 40% in the four months to 31st December 2020, driven by 40% UK sales growth and 52% in the US.
The period saw the integration and re-launch of Oasis and Warehouse brands on to its platform.
boohoo said it is close to finalising an extension of its UK warehousing capacity, with a new site to open in April 2021, creating up to 1,000 jobs.
CEO John Lyttle said: “I’m delighted with the group’s performance over the peak trading period. Our team worked exceptionally hard in 2020 as we navigated the many challenges, including the COVID-19 pandemic and the successful acquisition and integration of Oasis and Warehouse.
“Growth has been strong across our multi-brand platform and we have continued to grow our market share across all geographies.”