Boohoo has defended its treatment of suppliers this morning ahead of a BBC Panorama investigation that claims to have found evidence of staff pressuring suppliers to drive prices down, even after deals had been agreed.
The documentary, which will air at 8pm tonight on BBC1 and BBC iPlayer sent a reporter undercover to work for 10 weeks at Boohoo’s head office in Manchester as an administrative assistant.
In 2020, Boohoo accepted all the recommendations of an independent review that found major failings in its supply chain in England after newspaper allegations about working conditions and low pay in factories in the Leicester area. It pledged to fix the problems with its “Agenda for Change” programme.
BBC reporter Emma Lowther said she saw those promises being consistently undermined during her 10 weeks undercover at Boohoo, however: “Working at Boohoo is intense,” she said, with staff under “constant pressure to drive prices lower and lower.”
The investigation revealed that Boohoo put pressure on suppliers to drive prices down, even after orders had been agreed. On one day alone, the reporter was told to process a 5% cut on more than 400 orders that had already been agreed, saving Boohoo thousands of pounds, and sometimes price cuts were demanded for orders which had already been made and were ready for delivery.
Boohoo said in a statement this morning: “Like all businesses, we have experienced significant cost inflation over the last year, which we have absorbed in order to maintain affordable prices for customers,
“As the cost of raw materials, freight and energy started to come down, the group asked its suppliers to reflect this in their pricing through discounts of between one and 10%, and we passed the savings onto customers,” the spokesperson said.
“Boohoo has not shied away from dealing with the problems of the past and we have invested significant time, effort and resource into driving positive change across every aspect of our business and supply chain,” the spokesperson said.
“The action we’ve taken has already delivered significant change and we will continue to deliver on the commitments we’ve made.”
Boohoo grew rapidly during the pandemic when high street rivals were shuttered by lockdowns, but supply chain issues, higher product returns, competition from rivals like Shein and rapidly rising living costs hit them hard, resulting in a decline in share value of around 28% over the last year. Mike Ashley’s Frasers Group recently became Boohoo’s largest shareholder during a protracted campaign of share acquisition.
