BOOHOO CUTS TIES WITH 64 CITY FACTORIES
FASHION GIANT REACTS TO SWEATSHOP CLAIMS AND PLANS OWN BASE
UNDER-FIRE bosses of fashion giant Boohoo have cancelled their dealings with more than 60 city factories over allegations that workers were being underpaid and overworked in poor conditions, writes Dan Martin.
Appearing before MPs looking into the alleged widespread contraventions of employment law, executives also revealed that they plan their own factory in the city.
UNDER-FIRE bosses of fashion giant Boohoo have set out details of their plans for a new Leicester factory after cutting ties with more than 60 of its suppliers in the city following revelations that workers were being underpaid and overworked in poor conditions.
Company executives appeared before MPs recently to be asked about what they have been doing to tackle issues in the city’s garment industry which have been exposed in a string of reports.
Boohoo’s operations director, Andrew Reaney, told the House of Commons Environmental Audit Committee the company had cut ties with 64 suppliers in the city in recent months.
But he said Boohoo was committed to Leicester and was pressing ahead with its own manufacturing plans in the city, with a new factory earmarked for Thurmaston Lane.
Mr Reaney said: “At this point, we have applied for planning permission. The factory itself will be huge. We are talking about potentially 60 machinists, which is equivalent to 85, 90 workers.
“That is 90 more jobs in Leicester, and we are going to move our own sourcing and ethical and technical compliance team into the same building as well.
“That is part of our commitment to Leicester and part of us wanting to demonstrate to the industry that this is what a model for best practice looks like.”
The Mercury has seen a letter, sent by Boohoo’s sourcing and compliance team, saying some factories had closed in the past three weeks and warning it will carry out random spot checks among remaining suppliers from February “to ensure they are completing with the company’s code of conduct”.
Mr Reaney told MPs work was already under way to improve conditions at Leicester factories it used.
He said: “We have undertaken 400 audits alone this year in Leicester, and have eight auditors on the ground, plus our team. I am on the ground every week in those factories with the team. All of the factory visits are unannounced.”
Boohoo founder and chairman Mahmud Kamani told the committee: “We do business with these manufacturers on a very commercial basis, but we want to support them. We want to help them.
“It is very easy for us to take all of our production offshore, for us to move out of Leicester, but we are still here.
“Lots of people in the fashion industry have moved offshore, but we are here and sometimes it feels we are getting punished for it.”
Matthew Taylor, the government’s director of Labour Market Enforcement, updated the committee on the city situation and how national agencies and the city council were seeking to deal with problems.
He said: “One of the longstanding questions here is that the agencies are, understandably and quite rightly, strongly driven by intelligence and that also involves people blowing the whistle and contacting them because they have been mistreated.
“There has not historically been a very high number of complaints emerging from Leicester. That is the simple reality.
“The critical issue for Leicester City Council is a long-term development of relationships with the communities of owners, and of workers, to build trust and confidence so that people feel more able to report concerns, to blow the whistle, not to be as worried as they may be now about the consequences.
“The second thing about the nature of the problem – and this is gleaned from conversations, I can’t attest to it scientifically but I am hearing it over and again – is there are three types of garment businesses in Leicester.
“There is probably about a third to a quarter which are good businesses wanting to do the right thing, determined to do the right thing and often losing business as a consequence. At the other end there is probably a hardcore of about a quarter of businesses that are deliberately non-compliant and, of those, there is organised crime and labour market abuse is only part of what is going on there.
“There is also tax dodging, welfare fraud, counterfeiting, maybe people smuggling. We are talking strong organised crime here.
“In the middle, the largest group are businesses working absolutely at the margins and to maintain a profit they have to work at the absolute minimum, the bare legal minimum of what is required of them.
“What I think happens for those businesses is that often they end up non-complying, not because it is deliberate but because it is what goes with the kinds of market pressures that they are under.”