Leicester MP launches fresh attack on Boohoo management and investors
Leicester MP Liz Kendall has renewed her criticism of investors in online fast fashion giant Boohoo saying, with the exception of one, none of them had "changed any of their actual investment decisions" after she wrote to them calling for action about the treatment of workers in the retailer's supply chain.
Boohoo was rocked by an under-cover report by The Sunday Times during the height of the first lockdown that workers at a factory where its products were seen were paid as little as £3.50 an hour.
The revelations led to a slump in Boohoo's share price and the company hired Alison Levitt QC to carry out an independent investigation into its full supply chain. Levitt's report was published in September and, while she did not say that Boohoo had set out to exploit workers, the company had been aware of potential mistreatment of staff but had not taken action of remedy the situation. However she acknowledged that the business was now working to resolve the problems.
Kendall subsequently called for Boohoo chiefs, including co-founder and executive chairman Mahmud Kamani, co-founder Carol Kane and CEO John Lyttle, to stand down and wrote to the main investors in the business to encourage them to apply pressure to force change.
One of the company's main investors Standard Life Aberdeen sold its shares in the business but others Jupiter Asset Management, Fidelity, Invesco and BlackRock had remained as investors. Jupiter said it was satisfied with the company's response to the allegations.
“Fund managers need to champion responsible investing - not as the latest marketing gimmick, but because they intend to drive real change. Otherwise it is all just warm words and not worth the paper, or website, it is written on," Kendall said during a debate on the treatment of workers in the textiles supply chain in Leicester.
She renewed her calls for the company's leaders to stand down, saying: “I do not think that those who had turned a blind eye to these problems over many years were the right people to take the company forward. To be clear, the executive chairman and the chief executive officer should be removed.”
John Lyttle joined Boohoo from Primark last Spring and has pledged to clean up the retailer's supply chain. Earlier this week, Boohoo appointed former ASOS and Amazon executive Stuart McCabe as non-executive director in a move that is believed to signal a clear intention that the business wants to repair its reputation.
Upon his appointment McCabe said: “I am delighted to be joining boohoo at an exciting time when it is implementing its agenda for change. Having spoken extensively with fellow members of the Board, I look forward to helping the Group add further independent experience and increased oversight on matters of compliance and business practices.“