Fast fashion retailer Boohoo (who also own Pretty Little Thing, Nasty Gal, Misspap, Karen Millen and Coast) have been fairly prevalent in recent news. At the time of writing Leicester is still under local lockdown after developing twice the coronavirus infection rate of the next worst-hit English area, and people are starting to realise that this is, at least in part, down to the way garment workers are treated in the city. Boohoo has been around since 2006 and is one of the largest clients for Leceister’s garment industry. The quick turnaround of UK production means that around half of Boohoo’s production takes place in UK garment factories, most of which are in Leicester. Now new details have emerged on unethical practice in the factories supplying Boohoo’s stock, and more people are starting to wonder how ethical they really are.
Well, I’m here to tell those of you who didn’t already know: Boohoo has never been ethical, and they never can be.
Let’s talk about why.
This is the information that will be most well known due to recent coverage, but news of poor working conditions for garment workers making Boohoo’s stock is not new.
Before looking at the coverage of Boohoo’s behaviour, I initially checked their website for policies related to forced labour and modern slavery. They do have a modern slavery statement, and in 2018 Boohoo joined Hope4Justice / Slave Free Alliance to support Modern Day Slavery due diligence. Sadly, there’s no evidence that this has achieved anything, and making a statement is not the same as properly enforcing something. In their statement Boohoo say they use unannounced audits to identy and support needed changes, however a 2020 article from Forbes disputes this.
“Their audits are very basic. Boohoo are where other fashion brands were fifteen years ago. Their code of conduct is in direct conflict with how they pay their suppliers”.
So what other information is out there? The 2020 Fashion Transparency Index, which reviews and ranks 250 of the largest brands according to how much they disclose about their social and environmental policies, practices and impacts, gave Boohoo an overall score of 9%. The overall average is only 23%, because most large brands aren’t transparent, but Boohoo is still distinctly lower than this number. In 2019 Labour Behind the Label also published the Tailored Wages UK report which assessed whether leading brands ensured garment workers were paid a living wage, scoring companies from A (the best) to E (the wost). Boohoo didn’t present any evidence that workers were paid a living wage, and received an E grade.
Boohoo also fails to recognise workers’ trade unions, even at the most basic level. According to the House of Commons Environmental Audit Committee report, ‘Fixing Fashion: Clothing Consumption and Sustainability’, published on 19th February 2019:
She told us that Boohoo would recognise a union ‘if the workers would like it’ but that ‘there does not currently appear to be a demand for our workers in our Burnley warehouse to require a union.’ Following the evidence session this was contradicted by written evidence from the union of Shop, Distributive and Allied Workers (Usdaw), contesting Boohoo’s statements. This included evidence of 23 recruitment and awareness activities, dating back to January 2017, for Boohoo’s Burnley staff and written communications from Usdaw to Carol Kane and Boohoo’s HR Director asking to secure union recognition for Boohoo workers.
But there is evidence from before 2019 too. Boohoo is known as a prominent client in Leicester’s garment industry; both Channel 4 Dispatches and The Daily Mirror found that workers in UK garment factories that supply Boohoo were regularly paid less than half of minimum wage, while research from the Ethical Trading Initiative and the University of Leicester in 2015 found it’s very common for garment workers in Leicester to be paid illegal wages.
Prof Nikolaus Hammer, associate professor in work and employment at Leicester University, carried out research into the fashion industry in Leicester, where he found employees working in appalling conditions, with no employment contracts, earning on average £3 an hour. It was the brands, he said, who held all the power over manufacturers to keep cutting their prices. “They will go to the manufacturer and say that person down the road can do it for 1p less, and they get the job,” he said.
Plus, there was the 2018 investigation by Sarah O’Connor for The Financial Times on ‘dark factories’. These are described as part of Leicester’s garment industry that has become ‘detached from UK employment law’: £5 per hour is considered a top wage, while workers talk of factories with blocked fire escapes, old machines, and no holiday or sick pay. Seeing as Boohoo doesn’t publish a list of its suppliers, it’s impossible to know how many of these factories it does or doesn’t use. However, an interviewee in the report said that 99% of Leicester’s garment workers were paid less than minimum wage, so it seems almost impossible to avoid.
Furthermore, the existence of these dark factories was described as an open secret. As the report says ‘central government knows; local government knows; retailers know’. In later reporting O’Connor states how she only initially became aware of the problem because a senior Whitehall official told her. Additionally, a local official in Leicester warned her that the publication of the 2018 findings would cause mass unemployment for people with no other options (it didn’t, and nothing changed), and after publication O’Connor was invited to testify at a parliamentary select committee hearing into the costs of online fast fashion. The government rejected all of the committee’s recommendations.
So how do factories get away with it? One reason is that they often under-report hours. People’s payslips look as if they’re been paid minimum wage (for example recording workers doing 20 hours at £8 per hour when they’ve actually done 40 hours for £4 per hour). These workers are told to do this so they can ‘make up’ the wage shortfall by claiming welfare benefits, despite the fact that full-time work on minimum wage would give them more money. Unfortunately, workers may not know this because they are usually vulnerable, and therefore preyed on by employers. Workers are often immigrants with limited English and few options, making them easier to exploit.
One could also wonder why raids or auditing haven’t stopped this. In the original 2018 investigation, another interviewee describes seeing workers flee from a factory as it was raided. There was another dark factory nearby, and as the raid took place the boss slipped workers out two at a time to avoid also being caught. When raids happen, word spreads and the factories immediately empty out. In short, bosses already have plans in place to avoid being caught. This also can allow retailers to say they weren’t aware. They can claim they do random checks or find no issues when they audit, but that’s because factories know how to keep things hidden and present a clean image.
Additionally, one of the most common occurrences across global fashion supply chains (and the reason why many brands can’t say who made their clothes) is unauthorised subcontracting from a larger factory to a smaller one. It allows factories to meet increasingly tight demands from brands, while brands can still claim ethical operations. This happens all over the world, and in the UK. In Channel 4’s dispatches programme they sent a worker undercover into various factories, where they were paid well below minimum wage to make clothes for Boohoo, alongside Missguided, New Look and River Island. All retailers said their orders had been subcontracted to those factories without their permission or knowledge. This is probably true, in the sense that these brands didn’t know what was subcontracted and to who. But the practice of subcontracting was reported as an open secret in fashion supply chains in 2017.
I asked the room of more than 100 buyers if the practices I described—large factories subcontracting to smaller, substandard factories outside any kind of inspection or safety regime—sounded familiar. The first two buyers to raise their hands protested, saying their companies had very strict codes of conduct and that this kind of thing would never happen in their supply chains. But the third buyer, a woman seated in the very back row, was clear: “Oh yes,” she said, “this is exactly how it works—we have one eye open and one eye closed.”
Workers rights & COVID-19
When it comes to COVID-19, the specific allegations that have come to light recently in regards to Boohoo include:
- Workers were forced to continue working despite high levels of infection in factories,
- Sick workers were forced to come in and not tell any other workers, even after testing positive for coronavirus,
- No physical distancing or hygiene measures in factories
- ‘Furlough fraud’, including workers being asked to hide payslips so that management could claim more public money and being told to come to work if they wished to be paid furlough money
After this information became public, many people were upset by the prevalence of modern slavery and how this has contributed to the spread of the virus. Retailers such as Next, Amazon and Asos removed all Boohoo clothing from sale (which is, in itself, hugely ironic and a greenwashing move by these companies, in my opinion).
Since then, at the time of writing, seven separate government agencies have visited nine premises in Leicester. Thus far they have found no issues, but is this really a surprise? An investigation from two years ago explained how factories were both prepared to clear out in the case of raids and had prepared their books to make things appear above board, does anyone think they didn’t prepare to be inspected the moment this information gained traction? It seems like common sense that the publication of findings in 2018 would lead factory owners to put more plans in place to avoid getting caught. Combine this with recent high profile media coverage and, to me, it seems fairly obvious that factories would immediately ready themselves to evade detection. An article from July 10 2020, after major reports came out, described how many doors in Leicester’s Imperial Typewriter building (which holds multiple garment factories and is described as rickety and filthy) were padlocked, seemingly in retreat from the scandal. How can issues be found if factory owners see the news and clear out before they can get caught?
At the same time, Boohoo said it had begun to investigate allegations of worker mistreatment as soon as it was made aware of them. But how can this be true? These are not new claims, they have been circulating for years. So why wasn’t this investigated in 2015, or 2018, or any time since? It seems Boohoo has known about this, as has the government, and their auditing and reporting has always been lacking, either due to carelessness or lack of real will to see change.
The only difference now is that the reaction of the general public has changed. Are Boohoo upset by these findings, or are they sorry they got caught?
Boohoo is also marked down by Ethical Consumer for antisocial financial behaviour. I feel this is worth noting because most issues of underpaid workers and modern slavery in the garment industry are related to brands asking for things to be made at extremely low costs. Ethical Consumer noted that Boohoo’s three Executive Directors received over £1 million in total compensation in the year ended February 2019:
- Mahmud Kamani: £1,061,874
- Carol Kane: £1,071,564
- Neil Catto: £ 1,236,074
Ethical Consumer considers any remuneration over £1m to be excessive. This becomes even more important when we consider the endemic issue of underpayment and modern slavery at one end of the business, in contrast with excessive remuneration at the other. Boohoo could afford to pay factories more, and it chooses not to.
Ethical Consumer also viewed Boohoo’s list of subsidiaries in this annual report, and found that the ultimate holding company was incorporated in a jurisdiction that is considered a tax haven, with two subsidiaries also in jurisdictions viewed as tax havens. Of these, one was a holding company, which was a high-risk company type for likely use of tax avoidance:
- Boohoo Group Plc in Jersey
- ABK Ltd (holding company) in Jersey
- PrettyLittleThing.com USA Inc in Delaware, USA (this subsidiary is 66% owned by Boohoo Group Ltd).
Boohoo replied to an enquiry from Ethical Consumer saying that they registered for UK tax and pay UK taxes on all profits, but didn’t give an adequate explanation of why its ultimate parent company was incorporated in Jersey, nor why it had another holding company (ABK ltd) in Jersey, plus it published no country-by-country financial information. This led Ethical Consumer to give them the worst rating for likely use of tax avoidance strategies. These are all financial choices the company has made and must be considered when we then look at simultaneous financial choices that have led to modern slavery and illegal wages in production.
Boohoo & the environment
How brands consider the environment and act in relation to it also has real world consequences for people, so I decided to look into this area too. Ostensibly, it’s an area where Boohoo has improved. The Environmental Audit Committee wrote to 16 British retailers in November 2018, asking them to submit evidence detailing what they were doing to reduce the environmental impact of the garments they sell. Boohoo was among those who hadn’t signed up to targets set by the Sustainable Clothing Action Plan (SCAP) to reduce their carbon, water and waste footprint.
This has since changed, according to their website. Both this website and Boohoo’s 2020 annual report describe initiatives from Boohoo such as attempting to reduce carbon emissions through efficiency and renewable energy, using more recycled and sustainable fibres, recycling clothing instead of burning stock/sending it to landfill, requiring dyes to be compliant with REACH legislation, and removing unnecessary plastic packaging. They also say they’re looking at water use in regards to dyeing and bleaching, to attempt to minimise impact in this area.
On the surface, this seems like progress. Technically it is when compared to the absence of any action at all previously. However, there are some fundamental flaws that we can’t ignore. Most obviously, Boohoo’s business model is fundamentally not ever going to be fully ethical.
“The fundamental problem with much of fast fashion is that its social and environmental costs are not taken into account. The environmental costs of materials and fabric are mostly offshored. The production that takes place in the UK often only pays half the legal minimum wage.
“So who is accountable for water and chemical pollution abroad, precarious work and employment, the undercutting of compliant manufacturers, the pollution from delivery and lack of recycling at home? Brands might find it difficult to make £5 fast fashion dresses and be socially and environmentally sustainable.”
Fast fashion and ethics are inherently incompatible. Fast fashion requires too much consumption, too much resource use, too quick a turnaround, and prices that are too low. If degrowth economics is a model in which everyone has enough, fast fashion is a model with demands too high to ever be met ethically. The exploitation of people and planet has to be built into the system in order to turn a profit, with low prices leading to the need for constant overconsumption and overuse of resources in order to keep the cash coming in. At best a company may, one day, perhaps be able to become sustainable, in the sense that they are able to sustain the model they’ve created. They cannot, however, ever be regenerative, which is what we need all systems and models to become if we stand a chance of remaining within the limits of the resources earth has to offer. There is simply no way a fast fashion model can ever be a net provider of environmental or social good, rather than evil. One day, sooner or later, the resources will run out.
This is inherently not just a Boohoo issue. It’s every fast-fashion retailer and every high street store churning out huge numbers of clothes. If it’s not made slowly and in harmony with garment workers, farmers and soil, it’s probably hurting people and the planet. There are important questions to be asked about accessibility and price, so people shouldn’t feel shame if fast fashion is all they can afford. However, I believe these issues need to be addressed with a fair social system that supports everyone and eradicates poverty (learn more about universal basic income here), not perpetuating fast fashion in order to meet a need that does not have to be a need if governments decide to change the system.
So yes, this is a systemic fast fashion issue. But there is one more Boohoo-specific factor I’d like to point out. In going through Boohoo’s annual report, I saw Tom Kershaw listed as ‘Group Director of Sustainability’. The report says he ‘is responsible for developing our sustainability strategy, targets and goals, working closely with the product, procurement, supply chain, facilities, human resources and corporate affairs teams to do so’. Honestly, I thought Kershaw looked rather young for such a big role, and I noted that he was a white man. I was therefore intrigued, and decided to do a little more research to see what his background was. The following is public information from his Linkedin profile: Kershaw trained in law, and initially joined Boohoo under the title of Legal Counsel & Assistant Company Secretary, before moving on to Head of Group Legal & Assistant Company Secretary and then, inexplicably, Director Of Sustainability and Responsible Business. In June 2020 his title was changed to Legal, Communications & Sustainability.
But here’s the kicker. I wondered if Kershaw had experience in ethics or sustainability at another organisation before Boohoo. He didn’t. There is nothing on his Linkedin profile that suggests any knowledge or study of sustainability at all.
However, it gets worse. Kershaw’s role directly before joining Boohoo in late 2014 was as legal counsel for BAE systems, with the location listed as split between England and Saudi Arabia. The head of Boohoo’s sustainability provided (direct quote) ‘legal services and solutions to support the Saudi Arabia Business of BAE Systems’.
Let me repeat: Boohoo’s director of sustainability was previously employed by one of the world’s largest weapons manufacturers, specifically working in Saudi Arabia. Yes, the Saudi Arabia that has spent billions of pounds purchasing weapons from BAE systems and uses them to perpetuate the world’s worst humanitarian crisis in Yemen.
Kershaw left BAE just months before Saudi Arabia launched airstrikes against Yemen, so it’s hard to know how involved he was with sales of arms that were subsequently used. However, considering that countries tend to buy at least some weapons ahead of time, I would suggest he is not wholly innocent.
So yes, this is an industry-wide problem that needs to be addressed on a systemic level. But at the same time, I would like to leave readers with the knowledge that this man, trained in law with seemingly no specialist knowledge in ethics and sustainability, who worked for a huge weapons manufacturer directly before joining Boohoo, is the man Boohoo put in charge of their entire sustainability and supply chain operations. Make of that what you will.