Boohoo shares jumped 17% after publishing an independent review conducted into its supply chain.25 Sep 2020 10:18
In London, Boohoo shares jumped 17% after publishing an independent review conducted into its supply chain.
The review identified "many failings" in the Leicester supply chain and recommended improvements to Boohoo's corporate governance, compliance and monitoring processes. Alison Levitt, who was appointed to run the review, was satisfied that Boohoo did not deliberately allow poor conditions and low pay to exist within its supply chain, however.
Levitt is "confident that the adaptations which Boohoo should make involve a relatively easily-achieved realignment of its priorities and governance systems and that the board should not feel discouraged. It has already made a significant start on putting things right."
Boohoo said it will appoint two new non-executive directors, which will strengthen the board, and it plans for one of these roles to be filled by someone experienced in dealing with environmental, social and governance matters.
The retailer has recently appointed a new group director of responsible sourcing - who joins from a "major global apparel retailer" - and it plans to consolidate its approved supplier list. Boohoo will work more closely with suppliers to ensure they are able to "manage a more consistent and predictable flow of orders".
Boohoo Chief Executive John Lyttle said: "Today we publish Levitt's independent review in full. This has identified significant and clearly unacceptable issues in our supply chain, and the steps we had taken to address them, but it is clear that we need to go further and faster to improve our governance, oversight and compliance. As a result, the group is implementing necessary enhancements to its supplier audit and compliance procedures, and the board's oversight of these matters will increase significantly."
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