• Prices paid to Boohoo suppliers called into question as potential barrier to legal wage payments and sustainable growth
• Activists say Boohoo workers could be owed £125 million in unpaid wages for former illegal pay cases
• Boohoo Group AGM taking place today will see key challenges raised

Activists are posing key questions [1] to the board of Boohoo Group at their AGM today concerning the prices Boohoo pays to suppliers, and debts owed to workers.

Representatives from the human rights campaign group Labour Behind the Label will raise concerns about the impact of Boohoo’s purchasing practices on the ability of Leicester factory owners to operate legally, turn a profit and invest in their factories.
 
Citing Boohoo’s statements on ‘fair pricing’ for suppliers, activists are requesting that Boohoo publish details of the benchmarks they are using, and whether these prices ensure the minimum wage, or indeed the living wage, is payable under the standards.
 
Questions follow clear evidence that illegal pay of £3.50 / £4 an hour was common in Boohoo suppliers, linked to prices [2]. Evidence is being requested from the board that this situation has been addressed, particularly with regard to aggressive downward pressure on supplier prices.
 
Historic debts owed to workers from Boohoo supplier factories following years of underpayment of the minimum wage are also being raised. Activists say Boohoo could owe over £125 million in illegal underpayment of wages to workers who made their goods over the past 5-year period. The estimate is based on calculations from the British Retail Consortium that garment workers in Leicester at the peak of the illegal pay exposes were collectively being denied £2.1m a week [3].
 
Kaenat Issufo from Labour Behind the Label said: “Mahmud Kamani and the Boohoo board of directors need to own up to truth that Boohoo’s business model has driven abusive practices in its supply chain. Owning up means changing its purchasing practices, and making right the past wrongs that its business has created. Boohoo should pay the workers making its clothes a living wage and payback the millions in underpaid wages it owes to the workers who created Boohoo’s profits over the past ten years. It’s current approach of giving charity is demeaning and the community where I live is suffering as a result. Workers need rights not handouts.”
 
Some further details being requested concerning the brand’s commitment to building sustainable relationships with Leicester suppliers in the light of recent withdrawals from over 100 suppliers in the city [4].
 
ENDS

Notes to editors: 

• Labour Behind the Label is a campaign that works to improve conditions and empower workers in the global garment industry.
• The Boohoo Group PLC Annual General Meeting is being held at Boohoo’s factory at 301 Thurmaston Lane, Leicester, LE4 9UX on Friday, 17 June 2022 at 14:00

[1] https://labourbehindthelabel.org/boohoo-group-plc-agm-questions-2022

[2] Allison Levitt QC who was commissioned to conduct an internal investigation in allegations of illegal pay in  Boohoo Group suppliers found illegally low rates of pay at £3.50/ £4 per hour to be substantiated, and that directors knew of the seriousness of the issues but failed to act. https://www.theguardian.com/business/2020/sep/25/boohoo-report-reveals-factory-fire-risk-among-supply-chain-failings
 
[3] In 2020, the British Retail Consortium calculated that workers in Leicester were being underpaid £2.1m a week. https://www.thebusinessdesk.com/eastmidlands/news/2041936-leicester-textile-workers-owed-over-27m-says-report.
This had grown from 2015 estimates, where Unversity of Leicester research put this underpayment at around £1m a week. https://amp.theguardian.com/sustainable-business/sustainable-fashion-blog/2015/feb/27/made-in-britain-uk-textile-workers-earning-3-per-hour
 
Boohoo was sourcing 50-80% of Leicester’s total output between 2015 and 2021. It is therefore a conservative estimate to assume that £50m in underpayment of wages per year, should result in Boohoo owing £125m in over a 5-year period.
 
[4] https://www.cityam.com/boohoo-cuts-ties-with-hundreds-of-suppliers-following-leicester-factory-scandal/

Media contacts:  

• Dominique Muller, Policy Lead, Labour Behind the Label (at meeting), 07596 098 399, dominique@labourbehindthelabel.org
• Anna Bryher, Advocacy Lead, Labour Behind the Label, 07786 832 035, anna@labourbehindthelabel.org

For immediate release: 18 May 2022

Concerns raised about NEXT’s supply chain commitments ahead of Annual Meeting

Rights groups have expressed concerns regarding NEXT’s efforts to ensure supply chain workers are compensated fairly in a joint statement released on the eve of the fashion brand’s AGM.

In the light of the global cost of living crisis, Labour Behind the Label and ShareAction have issued a joint statement calling on NEXT plc. to honour its commitment to sustainability in supply chains, and ensure workers’ rights are protected.

The two organisations are raising a shareholder question to the board of NEXT plc tomorrow, calling for clarification on the company’s commitment to responsible purchasing practices, that they say have led, in the pandemic, to factory closures where workers were left with no pay, and poverty and debt experienced on an unprecedented scale.

The question cites two cases in NEXT suppliers – the Neo Trend factory in Turkey and Wai Full Textiles in Cambodia – where workers were left without their legally owed wages and severance payments following a withdrawal of Next’s orders causing the suppliers to close. The cases are given as an example of a wider systemic issue.

Labour Behind the Label and ShareAction are calling on NEXT to intervene and ensure that workers from both of these factories are paid their legally owed wages and severance. Furthermore the two organisations assert that the brand should reduce vulnerabilities for workers in its supply chain by making a public time-bound commitment to ensuring that workers are paid a living wage.

The question further queries the brand’s approach to wage improvement and how it is making efforts to ring-fence living wage levels in its price negotiations with suppliers so that workers’ wages aren’t the topic of cost saving.

Anna Bryher from Labour Behind the Label said: “The debt crisis experienced by Asian factory workers when fashion orders stopped in the pandemic, made abundantly clear the precarious situation that workers are in in global fashion supply chains. Living on a minimum wage in Asian garment producing countries (a third of a living wage or less in almost all cases) is near impossible, and building savings even less so. Brands like NEXT must urgently make sure living wages start to be paid into the pockets of workers who are making their clothes, to avoid future exploitation if orders once again grind to a halt. NEXT must do more than simply stating a commitment to change, and must stop prioritising profits that are being made on the backs of workers”.

Martin Buttle from ShareAction said: “Over the past few years it’s been clearer than ever that the treatment of the workforce in investee companies is a material risk that investors should be engaging companies on as part of their wider ESG strategy. Furthermore, responsible investors are increasingly engaging on company approaches to living wages not only in their direct operations but also in their global supply chain. Investors should pay particular attention to ensure that commercial practices are not undermining the standards they set for suppliers.”

The full text of the question being put to the NEXT plc board is available here.

ENDS

Notes to editors:

Labour Behind the Label is a campaign that works to improve conditions and empower workers in the global garment industry.

ShareAction is a campaigning organisation pushing the global investment system to take responsibility for its impacts on people and planet, and use its power to create a green, fair, and healthy society.

The NEXT plc Annual General Meeting will be held at Leicester Marriott Hotel, Smith Way, Grove Park, Leicester, LE19 1SW on Thursday, 19 May 2022 at 09:30.

Media contacts:

Anna Bryher, Labour Behind the Label, +44 (0)7786 832 035, anna@labourbehindthelabel.org

Conor Quinn, ShareAction, +44 (0)7444 696 214, conor.quinn@shareaction.org

More information about the Neo Trend NEXT supplier case is available on the Labour Behind the Label website here. Below is also a video that the workers made to raise their case.