Commodities

Boohoo cuts number of UK suppliers

Credit: REUTERS/DADO RUVIC

British online fashion retailer Boohoo on Thursday revealed a major consolidation in its supplier base as it published a full list of UK manufacturers to meet a pledge on transparency.

Publishes list showing 78 approved manufacturers in UK

Figure represents sharp drop from numbers in Levitt report

List was key recommendation of independent review

Shares up 3.2%

Adds details, shares

LONDON, March 25 (Reuters) - British online fashion retailer Boohoo BOOH.L on Thursday revealed a major consolidation in its supplier base as it published a full list of UK manufacturers to meet a pledge on transparency.

The list was released exactly six months after Boohoo accepted all the recommendations of an independent review led by senior lawyer Allison Levitt which found major failings in its supply chain in England in the wake of newspaper allegations about working conditions and low pay in factories in the Leicester area.

Boohoo's list details 78 approved manufacturers operating across 100 sites in Britain.

Publishing a list of UK approved suppliers was one of Levitt's core recommendations.

Last September, the group, which sells clothing, shoes, accessories and beauty products targeted at 16- to 40-year-olds, had set out steps to tackle the problems.

In November, Boohoo appointed retired judge Brian Leveson to independently oversee its "Agenda for Change" programme, which implements the recommendations of Levitt's report.

"The group has ceased doing business with a number of manufacturers who were unable to demonstrate the high standard of transparency required, despite being provided with opportunities to address any issues identified in the auditing process," Boohoo said.

A Boohoo spokesman declined to say how many businesses had been cut.

The company acknowledged that a figure of 78 manufacturers appeared to be a significant reduction from numbers quoted in Levitt's report - about 200 tier 1 suppliers and about 300 tier 2 subcontractors.

Boohoo said the difference reflected consolidation of the supply chain, and suppliers being required to bring so called cut-make-trim units in-house to allow for greater oversight and remove the issue of unapproved sub-contracting.

Also Levitt's figures included businesses which supplied goods and services other than garment manufacturing.

Shares in Boohoo were up 3.1% at 0833 GMT, extending year-on-year gains to 64% and valuing the group at 4.3 billion pounds ($5.9 billion).

Boohoo said the list was the result of work carried out through the "Agenda for Change" programme, to map and audit its manufacturers and introduce changes to the way the business works with its suppliers.

"This is the not the end of a project for us at Boohoo but the beginning of a new way of working with our suppliers," said CEO John Lyttle.

"We have faced up to the problems of the past and are now driving positive change in the industry."

($1 = 0.7305 pounds)

(Reporting by James Davey; editing by Richard Pullin and Jane Merriman)

((james.davey@thomsonreuters.com))

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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