Boohoo Group Plc has severed ties with a UK supplier following accusations of staff being compelled to work overtime at the warehouse. The decision, announced on Friday, comes after a BBC documentary titled “Boohoo’s Broken Promises” alleged that the fast-fashion chain was exerting undue pressure on garment suppliers. Boohoo CEO John Lyttle emphasized in a letter to the Environmental Audit Committee that the company remains committed to cleaning up its supply chain.
Boohoo, still recovering from a labor supply scandal in 2020, has undergone significant governance changes, cutting over 400 companies from its supplier network and conducting an independent review. Shares in the company fell up to 4.6% on Friday, having lost more than 90% of their value since 2020.
Lyttle clarified that Boohoo’s efforts to negotiate lower prices from suppliers are a temporary measure in response to easing inflation, not a consistent program of regular price reductions. The company is closing its Leicester warehouse, putting under 100 employees at risk of redundancy, as it invests in a new distribution center in Sheffield and opens a facility in the US.
Earlier reports revealed Boohoo labeling South Asian-made clothing as “Made in the UK,” which the company attributed to a misinterpretation of labeling rules. The recent developments, including the BBC documentary and mislabeling concerns, have raised scrutiny. Boohoo, known for brands like NastyGal and PrettyLittleThing, faces challenges amid the return of shoppers to stores post-Covid and increased competition from e-commerce rival Shein.
