Discount fashion retailer Boohoo Group PLC (AIM:BOO) continues to face pressure over its supply chain practices despite efforts to tackle systemic failings that have emerged in recent years.
Bloomberg reported on Friday that Boohoo has cut ties with an unnamed UK supplier following allegations of forced overtime at the supplier’s warehouse.
Earlier this month, Panorama discovered that Boohoo was using ‘Made in the UK’ labels on potentially thousands of garments that were actually manufactured in South Asia.
The investigation found that during last year plain T-shirts and hoodies had their original labels removed at Boohoo's flagship factory at Thurmaston Lane in Leicester.
The report followed an earlier expose in November 2023 revealing a toxic culture of pricing and deadline pressures in Boohoo’s supply chain.
In response to these allegations, the Environmental Audit Committee has published correspondence received by Boohoo boss John Lyttle in response to Panorama’s revelations.
“We have already delivered significant improvements within our supply chain and we remain resolutely determined to ensure that we continue to build on this,” wrote Lyttle.
In the letter, Lyttle pledged that Boohoo had “absolutely not reneged on any of the commitments we provided to you and the Committee in 2020”, referring to the 2020 labour supply scandal that discovered some of its UK garment suppliers were paying their staff less than minimum wage.
Lyttle said that Boohoo had undertaken a supply-chain consolidation throughout 2020 and 2021 to “strengthen our corporate governance”.
Lyttle also claimed the BBC incorrectly accused Boohoo of putting unfair cost pressures on fabric suppliers and ignoring examples of corporate non-compliance in the supply chain.
Commenting on the newly disclosed correspondence, Environmental Audit Committee chair Philip Dunne MP, stated: “Over the years, the Committee has shone a light on issues around sustainability and alleged concerns of poor working practices in the fast fashion industry.
“When appearing before the Committee in December 2020, and in its follow-up correspondence, Boohoo made clear that a number of improvements in governance and its supply chain were underway.
“BBC Panorama’s investigation was therefore troubling to us, as it appeared a number of these commitments were not being advanced.”
Dunne continued: “Since BBC Panorama’s programme aired in November 2023, there has been subsequent reporting of evidence of incorrect labelling by the company at its Thurmaston Lane site, which the company does not contest.
“This evidence of incorrect labelling practices is concerning: when consumers see labels describing a garment’s country of origin, they expect them to be accurate. I trust that the company is taking urgent steps to ensure that correct labelling practices are in place across its UK operations.”
Boohoo recently announced the shutdown of the Thurmaston Lane warehouse in Leicester, a move that potentially places nearly 100 jobs at risk.