Boohoo urges Home Secretary to license garment factories

Boohoo has written to Home Secretary Priti Patel to urge the Government to issue licenses for UK garment manufacturers following allegations of mistreatment of staff at a Leicester factory subcontracted by one its suppliers.

The allegations, made by an undercover reporter by The Sunday Times, sent the Manchester-based fast fashion's group's shares into freefall. Its shares closed on Friday at 229.5p but had been trading by as much as 415p before the report was published, and despite co-founders Mahmud Kamani and Carol Kane buying up £15m of shares to shore up the price.

In the letter the company's CEO John Lyttle, who joined from Primark in March of last year, urged Patel to work with the industry to tackle issues such as underpayment and poor working conditions.

“A joint effort between industry and government will ensure that the renaissance of [British manufactuing] which Boohoo group has been a proud part is a key contributor to our country’s trading future,” Lyttle said.

It is estimated that Boohoo makes around 40% of its clothing in the UK but it has been criticised in the past for the lack of transparency in its supply chain. Credit Suisse analysts estimate that as much as 7% of Boohoo’s production is undertaken by unmonitored subcontractors in the UK.

Last year Carol Kane was among a number of UK fashion leaders called to Parliament to account for sourcing practises. This week chair of the Environmental Audit Committee Rt Hon Philip Dunne MP wrote to the company to demand answers to the latest allegations.

Boohoo is not the only group to face criticism. Multichannel fast fashion brand QUIZ also faced allegations of underpayment at a supplier in Leicester. Like Boohoo, QUIZ asserted that this was down to a tier 1 supplier subcontracting work without permission.

Both QUIZ and Boohoo are conducting their own investigations, while Boohoo has also appointed Alison Levitt QC to conduct an independent review of its supply chain.

In his letter Lyttle said he endorsed proposals by the British Retail Consortium and All Party Parliamentary Groups for fashion and sustainability to introduce "Fit to Trade" licenses for suppliers.

“We firmly believe that 'Made in Britain' should be a label of pride for those wearing our clothes and badge of honour for those who make them.

“We wholeheartedly endorse the call by the British Retail Consortium, APPG for Fashion and Textiles and the APPG on Ethics and Sustainability for the Government to implement a 'Fit to Trade' licensing scheme that ensures all garment factories are meeting their legal obligations to their employees," Lyttle said.

He added that a "Fit to Trade" scheme could cover areas such as minimum wage, PAYE, VAT, health & safety and ensuring workers are not subject coercion, and that it would “create a barrier that prevents rogue businesses from accessing the market and undercutting legitimate fashion manufacturing companies, creating a level playing field for businesses to compete fairly."

Read our feature on the fashion industry's response to the Boohoo allegations here.