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Asos, Next and Zalando Stop All Sales of Boohoo from their Websites

CASSANDRA ACQUAH | LEGAL JARGON WRITER



Recently, retailers Next, Zalando and Asos announced a temporary halt to the selling of Boohoo products on their websites.

This announcement came after a Sunday Times report claimed workers in Leicester’s Jaswal Fashions factory, which is part of Boohoo’s supply chain, were paid £3.50 an hour. This is less than half the National Living Wage.

This follows claims made by employment rights group Labour Behind the Label, to have received reports of workers being made to work despite displaying symptoms of Covid-19 and were being denied pay if they wished to isolate.


Boohoo, in their statement, claimed they would be taking “immediate action to thoroughly

investigate how our garments were in their hands” adding that they would “ensure that our

suppliers immediately cease working with this company”. The retailer also committed to investing £10 million to “eradicate supply chain malpractice”.



Commercial implications

  • Following these serious allegations, Boohoo lost 1/3 of its market value, which is about £1.5bn. This was followed by a 12% decrease in shares the following day.

  • This situation would likely lead to a complete review of their supply chains which could encourage some other fast fashion brands to do the same, to ensure no malpractice is occurring.

  • Additionally, consider the impact on Boohoo’s reputation- this involves its customers, employees and fellow retailers. Boohoo, like many fast fashion companies, heavily uses social media for its business. An example of this is the use of “influencers” to advertise the retailer’s products on their social media platforms where they have exposure to large numbers of people, many of which are Boohoo's target market. Another is the creation of an app which provides exclusive deals to customers. The backlash they faced on social media led to many customers boycotting the brand, decreasing sales for Boohoo and also its subsidiaries such as Pretty Little Thing.

  • This impact on their reputation may also make “influencers” wary to do business with them in the future.

Legal considerations

  • The workers in the factory were being paid an illegal wage of as little as £3.50 which is less than the National Living Wage. Therefore, legal action could definitely be taken here.

  • This was a violation of human and employment rights - workers were being paid less than half the National Living Wage.


What measures can be put in place to reduce the chances of this happening again?




CASSANDRA ACQUAH


Cassandra is an aspiring solicitor with interests in retail

and media, as well as the steps being taken to increase diversity at all levels within the legal sector.




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