Flying into fashion storm
Boohoo, to its credit, has been trying to clean up its supply chain and governance in response to the blistering report from Alison Levitt QC. So it is acutely disappointing that on the same day as its new high-powered monitor, Brian Leveson, was delivering his debut ethics report last week, Boohoo bosses were in Dubai attending a glitzy event with suppliers.
Doubtless the sessions attended by Boohoo’s chief executive John Lyttle, as well as members of the founding Kamani family, can be classed as essential business.
however, the instruction on the vampedup invitation, replete with women in bikinis and doing high kicks, was to arrive at Dubai’s flashy hotels at the weekend before the real business began.
We are told that suppliers, mainly from the sub-Continent, were able to make their own choices about attending in the midst of the pandemic.
however, if you are a textile and fashion business, seeking to bid for or retain contracts with one of Europe’s fastest-growing groups, it would be tricky to stay away even if there were concerns about Covid-19.
Everyone involved in the event was, we have been reassured, tested for Covid before and afterwards and social distancing properly enforced.
But there were moments during the week when senior Boohoo executives were seen without masks, even though the rules on faced coverings in Dubai hotels in public areas are extremely strict.
The optics of all of this for a company under close scrutiny are all wrong. Some suppliers are understood to have been uncomfortable with the arrangements.
As seriously, even in the often over-exuberant fashion sector it is not a good image for the bosses to be living it up in Dubai amid a pandemic.
It is impossible to forget Boohoo is a company in the proc- ess of reforming practices in a supply chain where inattention to working conditions and pay in Leicester garment sweat shops has been shameful.
Home rule
WhEn it comes to financial regulation, Britain and the US tend to sing from the same song sheet.
After all, the Wall Street banks, like it or not, dominate trading, M&A and public fundraisings in the City. There is great potential for divergence ahead. Boris Johnson’s government, amid some resistance, is preparing to relax regulation, although the Singapore analogy is slightly bonkers. The rule of law in Singapore under the Lee family dynasty, still in control, is brutal, and it is the low-tax regime which is different. no one should have any doubt about attitudes toward financial wrongdoers, as former Barings trader nick Leeson could testify.
As far as one can tell, the approach favoured in London is simply about making it easier to trade new instruments, such as green bonds and their derivatives, and seeking to attract more initial public offerings to the Square Mile by changing listing requirements but not relaxing governance standards.
nevertheless, as post-Brexit UK liberalises, the Biden regime is tightening. The choice of Gary Gensler, a poacher-turned game keeper, as the next chairman of the Securities & Exchange Commission suggests, the Wild West of the Trump years is over. Gensler grew up at Goldman Sachs and was the key figure in imposing new discipline on America’s banks in the wake of the 2008-09 financial crisis. In his current role at the Massachusetts Institute of Technology, he has taken a keen interest in bitcoin. Better regulation of cryptocurrencies, not before time, probably will be a focus of attention when he takes over at the SEC.
Stronger consumer enforcement – defanged in the Trump years – is to be strengthened amid pressure from former presidential candidate Elizabeth Warren. Johnson’s instinctive liberalism is likely to face challenge from Biden’s interventionist tendency.
China syndrome
ThErE always have been big questions about the integrity of Chinese economic data. nevertheless, we have to take at face value the 6.5pc surge in output in the final quarter of 2020 and 2.3pc increase in the size of the economy over the full year.
As much of the world suffers under the shadow of the ‘Wuhan virus’ it is hard not to applaud this miraculous turnaround.
In much the same way as China’s struggle with Covid casts a shadow over global prosperity this time last year, we should reluctantly see the strong rebound as a shard of light.