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Computer glitch before i was finished
The problem is...as i see it. All these big fashion stores have been using sub suppliers and main suppliers for years at rock bottom rates which often ends in tears for the sub contractors. Most are having to work at subsistance levels paying one third of required basic pay and some crooked (most in fact) back street manufacturers are cutting corners on all aspects of requiements in law. Their main suppliers do not want any burdeb of responsibility and overhead costs for the suppliers is a major major problem. So the sub contractor often breaks every law in the book judt to keep going. Some ethnic sweat shops charge rent for employed illegals to sleep in the factories at night ...usually classed as security staff.
Safety, fire hazards, bad hygiene and toilet facilities, over staffing made possible by under paying, long hours and overtime for low rates. And careful management of book keeping and accounts. Often these premises get regular checks and warnings from local fire brigade and factory inspectors.
Yes most comply and pay for repairs but at the cost of corner cutting and wages cuts.
All the big fashion outlets use these dodgy sweat shops through a second sub- company so it does not show on their books but on the books of the supplier. In cases like Leicester it is easy to say to the media "we don't use them". But everyone in the industry knows that indirectly they do by sub contracting, no questions asked.
That is why if the heat gets hotter more institutions pull out. The main problem for boo.hoo and others is how to replace the offenders and keep them supplying at cut throat prices when the Govt is about to investigate their operations. The net result will be price hikes making their goods less attractive, driving customers to more upmarket brands. In other words...with Govt intervention uncovering improprieties like tax evasion and accounting irregularities.
Some business models may no longer be viable. I worked years ago for the American fashion charity GOODWILL USA store 'FLIPS' that went out of business due to fraud accounting and under paying contractors and staff. I was there the day the liquidators closed the doors in Curtain Street, City of London, so i saw how (sometimes) with competition pressures, these companies get up to EVERY trick in the book to avoid paying out in order to get the best deals and market share. The ball got rolling with 'FLIPS' when two supplier - contractors were not paid for four months and took them to court. What they owed to suppliers IF THEY PAID up on time would have crippled 'FLIPS' ..so i know what goes on. It is scandalous if you knew the truth.
Jupiter Asset Management, which owns a near 10% stake in Boohoo via its recently acquired Merian Global Investments arm, said it had been “actively engaging” with Boohoo over issues of supply chain management. “We have been given strong assurances by management that any suppliers found to be in breach of the company’s strict code of conduct will be terminated immediately and we will continue to engage with the firm regarding this situation,” Jupiter said ....
The problem is...as u see it. All these big fashion stores have been using sub suppliers and main suppliers for years at rock bottom rates which overtime ends intears for the sub contractors. Mostvare having to work
Jupiter Asset Management, which owns a near 10% stake in Boohoo via its recently acquired Merian Global Investments arm, said it had been “actively engaging” with Boohoo over issues of supply chain management. “We have been given strong assurances by management that any suppliers found to be in breach of the company’s strict code of conduct will be terminated immediately and we will continue to engage with the firm regarding this situation,” Jupiter said in a statement.
It said further visits would be carried out in the coming weeks but it had found no requirement for enforcement action so far.
GLAA head of enforcement, Ian Waterfield, said: “Allegations of labour exploitation are something we take extremely seriously and we will continue to take appropriate action to safeguard potentially vulnerable workers.”
Also to add this outside distributors add to single digit percentage of revenue.
Therefore considering this information £1.5billion is hugely overdone, by Friday this will be trading around £3.50 once everyone has read all the information.