Boohoo's profits up by almost half despite Leicester supply chain scandal

Online fashion retailer Boohoo has reported a strong performance in its latest trading update despite “unacceptable” working practices in its supply chain coming to light.

For the six months up to August 31, the firm’s profit before tax rose by 47 per cent on the same period in the previous year, a growth which has been propelled by the group’s acquisition strategy.

The update follows the revelation in July this year that one of Boohoo’s Leicester-based suppliers were found to be underpaying workers and failing to protect them from the COVID-19 outbreak.

An undercover reporter for the Sunday Times found staff being paid as little as £3.50 an hour in the factory, less than half of the minimum wage of £8.72. The report also found that staff were not wearing protective masks to reduce the spread of coronavirus.

John Lyttle, Boohoo’s CEO, commented: “Our business, along with many others, has faced some of its most challenging times in recent months…and we have comprehensively investigated reports on concerning and unacceptable working practices in our Leicester supply chain.

“Immediately after the media reports regarding Leicester garment factories that supply the group, we commissioned an independent review… to investigate the allegations of low pay and the extent of the group’s knowledge of the allegations, to establish the group’s compliance with the law and to make recommendations for the future.

“We published that report on 25 September and we have established a programme to implement the recommendations of the report to make substantive, long-lasting and meaningful change that all stakeholders in the boohoo group will benefit from.”

Commenting on the group’s performance, he added: “We are grateful to all and pleased to be able to report a strong performance with continued high growth rates in revenue and strong profitability.

“We also acquired two new well-known women’s brands, Oasis and Warehouse, and we acquired the remaining minority interest in PrettyLittleThing, all of which will support our continued growth and profitability.

“The group has continued to gain market share in all key markets and we remain optimistic about the group’s prospects with the belief that it is well-positioned to continue making progress towards leading the fashion e-commerce market globally.”

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