Boohoo Chairman Says It Feels Like Retailer Is Being ‘Punished’
(Bloomberg) -- The chairman of fast-fashion retailer Boohoo Group Plc, which has been criticized for labor problems at U.K. suppliers, said it sometimes seems like the company is being “punished” despite being a champion of domestic manufacturing.
It would be “simple” to move production offshore, but “we’re big supporters of U.K manufacturing; we are still here, and sometimes it feels like we’re getting punished for it,” Mahmud Kamani said while speaking before a U.K. parliamentary committee hearing on sustainability in the fashion industry.
Kamani’s appearance in Parliament caps a torrid year for the company he co-founded and is credited with turning into one of the world’s fastest-growing retailers. In June, Boohoo was accused of turning a blind eye to poor and unsafe working conditions in its suppliers’ workshops in Leicester, England. Boohoo subsequently hired Alison Levitt, a lawyer and former U.K. public prosecutor, to lead an independent review.
Levitt found that Boohoo had prioritized profit and growth and ignored “red flags” about labor violations, while clearing the company of any direct involvement.
The normally publicity-shy Kamani told the committee on Wednesday that he was “shocked and appalled” by allegations of labor abuse, though he stressed it had occurred at factories that were neither owned nor controlled by Boohoo. He said Boohoo had made mistakes while growing very fast, but added that he also believed the company had “got more right than wrong” during the past 14 years since it was founded.
Boohoo has been “very transparent,” Kamani said, noting that “no one forced” the company to hire Levitt or to publish “all 230 pages” of her report. He said he “cannot possibly know everything” that goes on in a fast-growing business, and that the company is committed to fixing problems. Boohoo has already cut ties with 64 factories in Leicester this year.
When asked whether he would meet with a trade union representing retail workers, Kamani said he wouldn’t because he “doesn’t want to join” the union, adding that Boohoo staff “were free to join if they wanted.”
With brands such as Nasty Gal and PrettyLittleThing, Boohoo is one of the largest users of garment factories in Leicester. Local sourcing allowed the company to quickly react to lockdowns in the U.K., offering more activewear rather than party dresses as many people stayed at home.
In September Boohoo raised its forecast despite the labor scandal initially prompting calls for a consumer boycott of the brand. It said sales would rise 28% to 32% in the year through February, up from previous guidance for 25% growth.
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