At a time when many companies were panicking and struggling due to covid-19-induced lockdown, one brand did particularly well: Boohoo, an online fast fashion retailer known for bringing the latest styles straight from b-list celebs to our wardrobes at ‘affordable’ prices.
It swapped its targeted Insta ads from photos of bikinis to pyjamas. And boy, did we eat it up.
In fact, according to Drapers, Boohoo did so well that it reported a year-on-year increase despite the covid lockdown.
But a couple of things don’t add up about Boohoo ethics. For example:
How, despite the government calling a halt to everything, did Boohoo still keep churning out its clothes?
And the question we’ve all turned a blind-eye to: how can it even afford to sell clothes so cheaply in the first place?
Boohoo ethics: what’s happening at factories in Leicester?
If you’ve ever wondered how a brand manages to sell a leopard-print maxi dress for £16 and make a profit, here’s your answer: the people in these factories frequently earn around £3 an hour.
BOOHOO IN NUMBERS
VALUE: £4.54 billion
REVENUE: £1.2 billion
PRE-TAX PROFITS: £92.2 million
BONUS POT FOR BOSSES: £150 million over three years if ambitious growth figures are met
HOURLY WAGE OF GARMENT WORKERS: £3.50 – regardless of growth
Even in Leicester, despite the living wage in the UK being £9.80 an hour.
Campaigning organisation Labour Behind the Label (LBL) have reported allegations of modern slavery and trafficking in Leicester’s garment industry, and say underpayment and non-payment of holiday pay are routine.
Factories get away with this by doing things like officially paying people for 20-hours a week and making them work 50 hours.
Boohoo ethics and coronavirus
In June, LBL published a report exposing the working conditions in Leicester’s garment factories during covid-19, leading to nationwide media coverage. You can read the full report here.
The report states that apart from a two-three day break when the government first announced lockdown, the factories continued work without stopping.
Dominique Muller, the author of LBL’s report, told the Guardian: “People are being paid far less than minimum wage on dodgy contracts, asked to continue to work even when they had coronavirus, not being kept far enough apart, not doing enough to stop spread of virus.”
LBL found that employees were told if they didn’t come into work they wouldn’t be paid. There are rumours of furlough fraud.
In fact, the report says:
“We have been informed that several employers have joked that they are now getting rich through the furlough scheme as the money is not paid to the workers”.
While this hit the headlines because of coronavirus it revealed some much darker truths about Leicester’s clothing factories – and the garment industry as a whole – that we have been ignoring for a while.
Muller made it clear: “This isn’t just about coronavirus. Some workers live in accommodation owned by the factory. They pay them rent. They get by as a family of four on about £8,000 a year.”
Why haven’t we noticed this before?
Leicester has a history as a manufacturing city and has a large immigrant population. The workers are often from minority ethnic groups, perhaps undocumented, don’t speak English very well and have little alternative choice. Companies manufacturing their clothes there have taken advantage of this by dropping their salaries.
An FT article in 2018 highlighted:
“In parts of Leicester, workers are paid as little as £3.50 an hour. Why is no one being held responsible?”
Subsequently, a parliamentary select committee began an investigation into the impacts of fast fashion.
The government rejected every one of the recommendations – which seems unbelievable, but it’s true.
One factory told the FT that Leicester is its own “country within a country”.
So, what have Boohoo said?
In its public statement, Boohoo said: “We are shocked and appalled by the recent allegations… We want to ensure that the actions of a few do not continue to undermine the excellent work of many suppliers in the area, who succeed in providing good jobs and good working conditions.”
If this wasn’t so serious, this denial would be laughable.
Even parliament highlighted Boohoo’s illegal working practices in last year’s Environmental Audit Committee report, Fixing Fashion.
Their chairman Philip Dunne, says:
“It is incredible that over a year since the Committee highlighted illegal working practices in its supply chain, Boohoo has publicly denied any knowledge of what has been happening for years.”
It’s important to point out that Boohoo’s ethics are not the only ones being called into question.
The factories where these transgressions allegedly take place supply Boohoo. Technically, it’s not Boohoo itself that has been employing workers for less than minimum wage and in unacceptable conditions.
Boohoo just buy up to 80% of the garments created in the factories that do.
In fact, it’s these very contracts put in place by fast fashion brands like Boohoo, demanding low prices and incredibly quick turnaround times, that drive down wages and working conditions, says Better Buying.
Essentially, brands profit from outsourcing modern slavery and then distance themselves from it.
Of course, the allegations are far from few or new.
Any attempts from workers to unionise have been so-far thwarted.
Boohoo ethics: share price yo-yos
When the report first hit, share prices plummeted.
This is partly because Boohoo – up until the headlines made public what everyone knew – had been part of ‘ethical’ investment portfolios and some promptly sold their shares.
But, this could prove beneficial to the owners, who used the crash in price to buy back some of their company at a cheaper price.
Boohoo’s co-founders Carol Kane and Mahmud Kamani bought £15m worth of shares in their company, helping drive the share price up by 12%, recovering much of the dive, says the Guardian.
Despite Boohoo ethics still in question, their share price has been fairly steadily increasing since, with investors lured back by the promise of significant profits once this all blows over and we all go back to shopping like we did before.
But, thanks to continued media pressure the price dropped again by almost 10% – or £300 million – on Friday.
It’s still up on its lowest drop and on this time last year.
Boohoo is more than one brand, it’s a fast fashion empire:
Boohoo owns sister brand Pretty Little Thing, Coast, Karen Millen, Nasty Gal and in June of this year was lauded for saving Oasis and Warehouse from going into administration.
The co-founders could be in for a multi-million pound pay day by selling back the shares they bought so cheaply.
But surely no-one will buy their clothes?
Err… you would hope. But, the lure of cheap clothes is strong.
Key influencers have continued to work with Boohoo, promoting clothing from the portfolio of brands.
Boohoo’s social media numbers dropped after the initial news broke, but have now recovered – and even grown.
Boohoo ethics: what happens now?
Probably not a lot.
Boohoo has set out the terms of an “independent” review of its Leicester supply chain, which is being led by senior lawyer Alison Levitt QC and will include a public call for evidence.
Some people have raised concerns that an enquiry commissioned and paid for by Boohoo can’t be completely independent.
People can be so skeptical. Including us.
So, where can you buy guilt-free fashion?
When the high street is full of brands that aren’t walking the walk when it comes to ethics, who should you buy from? Well, you can start by checking out any of the fashion brands you find on Live Frankly. We’re building our directory of trusted brands.
If something looks too cheap to be true, someone somewhere is paying the price.
If you need reminding of what’s really going on behind the greenwashing, you can check out this handy tool from the Clean Clothes Campaign. Type in the name of any brand to find out what you need to know about its supply chain – and, just as importantly, what information is missing.
This article was written thanks to a group of people in fashion collaborating to bring about genuine change in the industry.
“Never doubt that a small group of thoughtful, committed citizens can change the world; indeed, it’s the only thing that ever has.” – Margaret Mead
Main image: Vimeo