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Boohoo must take fashion more seriously after factory scandal | Business


The fashion retailer Boohoo says on its website: “Our philosophy’s pretty simple: we don’t take life, or fashion, too seriously.”

The company will be taking life and fashion much more seriously after its share price fell by a third over the first two days of the week and by another 15% on Wednesday morning.

At issue are allegations that it sources clothes from factories and warehouses in Leicester that have poor health and safety records and in some cases pay their staff less than the minimum wage. Boohoo has said it has not found any evidence of suppliers paying less than the legal minimum wage.

Leicester is in lockdown after an outbreak of coronavirus that can be traced in part to the city’s rag trade and, in particular, factories that have stayed open since March in contravention of government guidelines.

Boohoo’s board said it was “shocked and appalled” at the allegations and was committed to working to rebuild the reputation of textile manufacturing in Leicester. It has appointed a senior lawyer to look into allegations that its supply chain included firms that breach its own code of conduct, and in respect of minimum wages, the law.

It should not take long for Alison Levitt QC to produce a report. Everyone in the business knows a check on suppliers can take only weeks, even when they are overseas.

More than that, Levitt can look back at documentaries by the BBC and Channel 4 and a report in the Financial Times on alleged abuses of health and safety rules and minimum wage rates in the east Midlands city.

In 2018, parliament’s environmental audit committee took evidence alleging that elements of the UK’s clothing industry were a cheap and not so cheerful business run on sweatshop, mostly female labour.

Owen Tudor, a TUC official for 34 years and now deputy general secretary of the International equivalent, said the Ethical Trading Initiative, which brought together unions, good employers and NGOs in 2015 to highlight the problem, “could not get central or local government agencies to take action”.

All the while, Boohoo’s co-founder Mahmud Kamani has become a billionaire and is set for a £50m bonus if the company’s share price recovers.

Did the board wilfully ignore abuses under its nose? Was the bonus culture a driving force in pushing down costs at suppliers? They do not appear on the list of questions that have been posed.

But if the company is to avoid becoming a symbol of Britain’s low-pay, low-investment culture, it needs to go further and ask these questions of itself.

FirstGroup woes add to existential crisis facing UK’s railways

The troubles are mounting at FirstGroup. In an existential update to the stock exchange, the company warned about its ability to continue as a going concern, after swinging to a £300m loss in the year to the end of March.

Since then, things have only got worse. For the company to say passenger numbers have been “reduced very substantially” by the coronavirus lockdown is something of an understatement.

Far from the buccaneering free-market railway envisioned by the Conservatives before privatisation in the 1990s, a “substantial proportion” of FirstGroup staff are now paid directly by the state on the furlough scheme, while a £300m taxpayer-backed loan is helping it stay afloat. Rail franchising has been temporarily scrapped, effectively renationalising the system.

As the government plots a course to scaling back its emergency support and tries to get Britain back to some semblance of normality, it should be clear that public ownership and operation of railways is one lockdown-era change that should remain. Keeping Britain’s trains running is far too important to allow it to suffer an existential crisis. Richard Partington

Brexiter at WTO helm would underscore era of deglobalisation

Liam Fox has been nominated by Boris Johnson as Britain’s candidate to lead the World Trade Organization. It would be ironic in the extreme if such an ardent Brexiter took over the global arbiter of trade disputes.

Fox taking over the WTO would underscore a new era of deglobalisation. As a prominent Atlanticist, he could have Washington’s backing. But any friend of Donald Trump’s would probably be blocked by Beijing.

Indeed, Fox is unlikely to win backing from any other nations, making his candidacy next to meaningless. And herein lies yet more irony: any chance of making progress on the world stage is being ditched for tribalism. How very Brexit. RP



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