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Boohoo Inaugurates Leicester Factory as Asos Tackles Modern Slavery

Two of Britain’s leading e-tailers are grappling with fast fashion’s poor labor-rights history.

Boohoo Group, which faced allegations of poor pay and working conditions in the English city of Leicester, where many of its domestic suppliers are based, has begun production at its first wholly-owned manufacturing site, which it said Tuesday is “proof of its commitment to the city of Leicester and ethical British manufacturing.”

The 23,000-square-foot factory on Thurmaston Lane will allow the Gen Z favorite to pump out tens of thousands of garments for its 13 brands, including BoohooMan, Dorothy Perkins, NastyGal, PrettyLittleThing, Karen Millen and Warehouse. The facility will operate in two shifts, Boohoo said, creating up to 180 new positions. All workers will receive the same benefits as other Boohoo Group employees, including private medical care, free company shares and pay above the national living wage.

Marking what CEO John Lyttle referred to as an “exciting new chapter” for Boohoo, the space will jointly serve as a site for training and guidance for suppliers. The e-tailer is also in talks with schools about hosting students who are interested in learning about garment manufacturing.

“It is more than just a factory, it’s a hub of learning and collaboration, as it gives our own teams the chance to work onsite and an opportunity to see a working factory firsthand,” he said in a statement. “We welcome the opportunity to share that knowledge with the amazing education institutions in the city and strengthen our collaborative working relationships with our approved suppliers.”

The initiative is part of Boohoo’s broader Agenda for Change to address what an internal review identified as myriad supply-chain failings following reports of sweatshop-like conditions during the first wave of the pandemic. Though the investigation found no evidence that Boohoo had committed any criminal offenses, it determined that reports about low wages and unsafe conditions were “substantially true” and that “weak corporate governance” had rendered the company’s monitoring of its Leicester supply chain “inadequate.”

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Boohoo promised to fix its problems, publishing a list of its first-tier suppliers, developing new responsible purchasing practices and helping establish the Leicester Garment and Textile Workers Trust to provide “guidance, advocacy and remedy.” It also joined the International Accord for Health and Safety in the Textile and Garment Industry, the successor to the Accord on Fire and Building Safety in Bangladesh.

But Covid-19 has continued to rattle the e-tailer, which issued an unexpected profit warning in December, its second in four months, that fingered supply-chain snarls, spikes in air-freight costs and “significantly” higher return rates. Boohoo said it expected a 12 percent to 14 percent net sales growth in the year to Feb. 28, down from the previous guidance of 20 percent to 25 percent.

‘Critical friendship’

Meanwhile Asos revealed Tuesday that Anti-Slavery International, the world’s oldest human-rights organization, will be advising the pureplay on the development of the “next phase” of its modern-slavery strategy.

The new three-year agreement, which builds on a longstanding partnership and will run through 2025, will help fortify Asos’s forthcoming human-rights strategy as part of its Fashion with Integrity roadmap for 2030, to be announced by the end of next year. One core priority, Asos said, will be the establishment of stronger legal frameworks to tackle global systems at the root of forced labor in supply chains, such as ensuring that companies are obligated to take “meaningful action” to eliminate slavery and that workers have access to remedy and justice.

“Our new, three-year partnership with Anti-Slavery International builds on the solid foundation of collaboration and ‘critical friendship’ that we’ve established in our work together since 2017,” Simon Platts, responsible sourcing director at Asos, said in a statement. “With dedicated resources and the opportunity to work together to drive change at scale, this new agreement takes things to the next level—and we’re so excited to be hitting the ground running in 2022.”

Each year of the partnership will zero in on one or more of Anti-Slavery International’s “intersecting” strategic areas, including ending child slavery, migration and trafficking, modern slavery and climate change. Anti-Slavery International will also work with Asos to craft new solutions to identify and mitigate “critical areas of risk” in its supply chain, with the larger goal of disseminating best practices to fuel “industry-wide change.”

“Our ‘critical friendship’ with Asos means that we can continue our work together to push for a fairer, more sustainable fashion industry that no longer relies on forced labor,” said Jasmine O’Connor, CEO of Anti-Slavery International. “We know that the fashion industry has a huge impact on people and planet, and we are looking forward to working with Asos for much-needed industry-wide change.”

Asos previously gave Anti-Slavery International an infusion of funds to support the work of the Migrant Resource Centre, which helps migrant workers in Mauritius raise grievances and seek redress. The e-tailer is also part of a consortium of companies, investors, business associations and initiatives that recently urged British lawmakers to introduce a legal requirement for companies and investors to carry out human-rights and environmental due diligence in the United Kingdom.

Asos, too, has struggled with logistics bottlenecks and demand volatility in the four months to Dec. 31. Earlier this month, the company posted a 5 percent increase in revenue growth. Its gross margin also tanked by 400 basis points to 43 percent. CEO Nick Beighton suddenly stepped down in October after Asos warned that 2022 profits could tumble by more than 40 percent.