boohoo Group PLC cleans up UK supply chain but still ‘miles behind’ competitors,

boohoo Group PLC () is not about to become the poster child for sustainability efforts after publishing its list of UK suppliers.

While the changes are welcome, many of its rivals have been doing the same for years, experts note.

READ: Boohoo publishes list of UK suppliers as part of new sustainability strategy

The fast-fashion clothier has made an effort to boost transparency following reports of poor working practices in its Leicester supply chain last July and a subsequent investigation.

It has been working with independent auditors Verisio and Bureau Veritas to carry out unannounced visits to suppliers and over the last eight months, with most suppliers being audited twice.

Former High Court judge Sir Brian Leveson, who was appointed to provide independent oversight, said “it is clear that few, if any, companies undertaking due diligence of their supply chains have gone to the lengths undertaken by Boohoo and for which it deserves credit.”

But according to Thulsi Narayanasamy, senior labour rights lead at the Business & Human Rights Resource Centre, this is just “the bare minimum”.

“[What] they have done needs to be looked at in that context, which is that it’s good, but it’s coming very, very late,” she told Proactive.

“The critical point here is that has always been miles behind their competitors when it comes to any human rights due diligence in their supply chain. They have been so far behind for so long and that distance still remains. You’d have their rivals who have been undertaking due diligence, and learning from that due diligence, for years and years.”

In fact, (), () and Zalando had dropped boohoo from their roster of clothes stockists as soon as the scandal emerged last summer, because they weren’t compatible with their own standards.

Patrick O’Brien, UK retail research director at GlobalData, noted that ASOS’s chief executive Nick Beighton had for many years complained about working conditions in Leicester factories, saying it had put him off keeping more manufacturing in the UK.

“That said, all boohoo’s rivals will have noticed the share price impact that the boohoo story has had, and that ensuring ESG reputation is maintained is not just about the relationship with customers, but with investors too,” he told Proactive.

The price question

As a result, it’s likely that the fast-fashion clothier’s prices will rise, O’Brien commented, after ensuring that all workers will be paid fairly.

In a competitive retail market, it may struggle to pass increased costs up to its customers, who tend to be in the younger population segment – the one most hit by the COVID-19 crisis, with under 25s accounting for two-thirds of job losses in the UK.

However, the firm’s test-and-repeat manufacturing system could help to keep the price tags low, since it can figure out which items are doing well and ramp up their production.

Nonetheless, gross margin shed 0.5% to 53% in the four months to December 31.

It takes time

Going forward, boohoo has called in Bureau Veritas to audit the supplier base, with a report scheduled for next September.

It will apply the same standards that have been used to approach audit in the UK, though they will be tailored to local laws and regulations.

In December, boohoo dropped two Pakistani suppliers after a Guardian investigation uncovered poor working conditions, with employees being paid 29p per hour and occasionally working 24-hour shifts.

But it will take a while to see if the AIM-listed giant is walking the walk.

“The main thing to remember is that these are steps in the right direction, but the work isn’t done yet. Until new practices and attitudes are fully embedded into the way boohoo does business, it will be hard to know if these changes are truly effective,” Sophie…