In the cutthroat fast fashion industry that produces and sells much of Britain’s clothing, persistent revelations of mistreatment and underpayment of factory workers have long laid the blame on the tyrannical retailers who order the clothes. Influential brands want to keep their costs as low as possible, meaning they can sell a dress for £8 and still make a decent profit, even if it means smaller manufacturers will struggle to cover their costs.
This reckless approach to business led to a sudden drop in payments to Boohoo suppliers this year, even after the clothes were made and shipped, according to a new undercover agent. panorama Research Boohoo’s Broken Promises.
The BBC show suggests this happened at the behest of Boohoo co-founder Mahmood Kamani. Isn’t it time for small businesses to get better legal protections from the whims of billionaires like him?
The pressure on Boohoo to further cut costs in recent years has certainly come from the top. We know this thanks to Kamani’s internal email. “I don’t want prices to go up,” Kamani wrote to his employees in 2018. “We have clearly started to overpay. Now I want to review every style released before it goes live and discuss costs.”
“We will act faster and faster,” he explained. And if that “doesn’t suit anyone,” he added, then Boohoo “doesn’t belong there.”
The emails were revealed in an independent report by lawyer Allison Levitt commissioned by Boohoo in 2020 after campaigners and journalists exposed exploitative and dangerous practices at many of Leicester’s garment factories. Confronted with Levitt’s findings three years ago, the brand admitted mistakes and promised ethical improvements as part of its Agenda for Change program.
A member of Boohoo’s management admitted that shoppers need to take more account of the true “cost of fabric”; Labor costs; overheads; Package; When ordering clothes, consider “transport” so that the cost is not too low.
The retired judge tasked with overseeing the reforms, Sir Brian Leveson, also stressed that paying fair prices for clothes should be at the center of Boohoo’s efforts. “Cost,” he wrote in a 2021 report, “is a critical element of proving that what Boohoo has ordered from a supplier can be delivered ethically.”
But now he and his company seem to be back to their old tricks. Against this backdrop, it must be seriously questioned whether Boohoo and the entire fast fashion industry will ever be able to operate sustainably and fairly. panoramaaccusations.
Journalist Emma Lowther, filming at the company’s Manchester headquarters in April after taking a job as an administrative assistant, filmed Boohoo shoppers admitting to “lying” to suppliers about how they could buy clothes cheaper elsewhere .
Lowther learned that Boohoo was demanding a 5 per cent price cut on 400 orders already agreed, which “appears to be a common tactic”.
She saw an email from a supplier in which Boohoo said a 10 per cent price cut, apparently imposed on the factory without an agreement, was “FOLLOWING ME to work below cost”.
She overheard the manager telling co-workers that, as in those 2018 emails, Kamani had again instructed her to make him personally pay any purchase price. “We can’t deliver anything without Mahmoud’s approval,” the buyer told his team.
Lowther even managed to talk to Kamani himself after he showed up at a staff party in a Rolls-Royce. The boss confirmed that he still communicates personally with suppliers and joked that “it’s not good for her, but it’s fine for me.”
I told Bukha panorama that the company asked suppliers to offer deep discounts of up to 10 percent on their orders, but stressed that Kamani did not unilaterally cut prices and said any savings were passed on to customers. It says all suppliers “pay at least the national minimum wage” and that suppliers will not do business with the company “unless the work is profitable”, but this takes time. panoramasays it is “extremely serious” and is investigating.
If claims about the fast fashion giant forcing factories to cut prices sound familiar, that’s because Missguided did the same to its suppliers months before the company filed for bankruptcy in 2022. I It emerged that Missguided owed a number of small businesses millions of pounds which they were unable to repay despite the site being relaunched by new owners.
I also looked into the situation in Leicester’s textile sector in 2021, a year after the major Buhoo scandal, and heard several stories of sweatshop factories in the city still paying their workers less than the minimum wage.
This was depressing to hear and it was important to get this information out there. But I can’t say I was surprised then, and I can’t pretend to be shocked by the recent allegations – especially since another undercover reporter from… Time Last year it was revealed that warehouse workers in Lancashire were calling themselves “slaves” and after workers in Leicester protested against deteriorating pay and working conditions last month.
What can and should be done now?
Dominik Müller, policy director at sustainable fashion campaign group Labor Behind the Label, explains: I that the law should provide greater protection for suppliers and employees, especially when their clients try to renegotiate a deal or go bankrupt because they owe large sums of money.
“We need to reform an industry in which rich people micromanage large companies and have the power to dictate terms to suppliers,” says Mueller. “Large companies that remain at the helm with charismatic founders often lack robust decision-making processes to deliver on their brands’ responsibilities to their code of conduct.”
But she adds: “I wish it were as simple as asking Kamani to resign.”
“The government must hold companies to account and ensure ethical, transparent and sustainable labor practices.”
The problem is that if the UK attacks the fashion industry too harshly, brands are likely to respond by sourcing even more clothes from factories overseas. Allegations made last year against Chinese brand Shein Channel 4 A documentary showing that workers in supplying factories were paid as little as 3 cents per garment shows the danger this poses.
It is unlikely that Kamani, having survived his company’s scandal in 2020, will resign in response to this latest scandal. However, Boohoo’s growing financial crisis could cause it further damage. Last month it emerged that sales in the UK had fallen 19 percent and were expected to underperform forecasts in the coming months.
There is no evidence that Kamani’s company will go bankrupt like Missguided. But as Mike Ashley’s Frasers Group, which sold Missguided to Shane last week, gradually increases its stake in Boohoo to 10 percent and becomes its largest shareholder, the co-founder could come under greater internal pressure to resign if performance does not improve. .
Rob Hastings does ISpecial Projects Editor
Source: I News
I am Moises Cosgrove and I work for a news website as an author. I specialize in the market section, writing stories about the latest developments in the world of finance and economics. My articles are read by people from all walks of life, from investors to analysts, to everyday citizens looking for insight into how news will affect their finances.