Even as a cofounder is being deposed in a pricing lawsuit and new allegations shine a spotlight on its factory partners’ pay practices, Boohoo might be hoping to shift the conversation with a 500 million pound ($692.4 million) scheme creating 5,000 British jobs in the next half decade.
But the the ultra-fast-fashion e-tailer is also drawing scrutiny after CEO John Lyttle dismissed the notion that Boohoo makes “throwaway” products, stating on a BBC “Wake Up to Money” podcast Wednesday that internal purchasing data “wouldn’t correlate” to the idea that consumers toss the firm’s wares, like $20 jumpsuits and $17.40 split-hem jeans, after just a few wears.
Lyttle also countered questions about sustainability by pointing out that about 20 percent of “most” of Boohoo brands’ autumn ranges are made with what he described as “more sustainable” or recycled yarns and fabrics. And though Boohoo is selling a “Ready for the Future” range helping consumers “[do] your bit for the planet,” a 95 percent recycled poly crop top for example, is selling for $4.80, at a 60 percent markdown. Despite its cost matching what many pay for a cup of coffee, Lyttle insisted Boohoo’s prices are “not the cheapest.”
Meanwhile, in a report published Thursday, the ultra-fast-fashion e-tailer, which also owns Nasty Gal, PrettyLittleThing, Karen Millen, Oasis, Warehouse, Debenhams, Burton, Dorothy Perkins and Wallis, outlined plans for growth and detailed its contributions to the British economy.
“The growth this business has experienced over the last 15 years has been phenomenal,” Lyttle said of the “Economic Impact Report.” “It has not been without its challenges, but it is right to celebrate the significant contributions the company makes to the towns and communities where we operate. The investments we have planned will help us to continue our growth, increasing our customer base both at home and abroad, adding even more value as we do so.”
Boohoo’s rapid growth has earned the company a global fan base, with 50 percent of sales now coming from international markets including the U.S. and Australia. The half-billion-pound investment plan earmarks funds for new warehouse space and “smart IT solutions” to foster operational efficiency addressing overseas demand.
Today, Boohoo’s logistics arm employs 7,000 people across four distribution centers in the U.K., shipping roughly 190,000 to 230,000 parcels a day via 13 main carriers, which support an estimated 1,660 jobs, the report noted.
For the annual financial reporting period ended Feb. 28, 2021, Boohoo’s operations added 559.4 million pounds ($774.7 million) in gross value added (GVA) to the U.K., supporting an estimated 8,050 full-time jobs and equating to about 4.4 percent of the total U.K. apparel and footwear retail sector, the company said. Boohoo says it has added almost 2 billion pounds ($2.77 billion) in GVA to the U.K.’s economy.
Every job directly created by Boohoo contributes a further 1.7 jobs to the wider economy, it noted.
According to Boohoo, 94 percent of the jobs and economic halo it created benefited locales outside of London, like Bunley, which hosts its international distribution center, and Manchester, where headquarters are based.
In the northwest U.K., Boohoo contributed 309 million pounds ($427.9 million) in GVA to the regional economy, employing 3,208 people there as of January.
In the year ended Feb. 28, the company elevated more than 1,400 warehouse agency workers onto permanent Boohoo contracts with full benefits and free annual share allocation.
Since 2013, it has paid over 36 million pounds ($50 million) in corporate tax, and in the most recent annual financial reporting period paid 10.47 million to HMRC, or Her Majesty’s Revenue and Customs, the U.K. department that collects taxes.
“We are proud that our growth gives back to the country we are a part of and we are committed to making a positive contribution to the U.K.,” Boohoo said.
Boohoo’s job news will do little for Britain’s ailing high streets. When the company acquired brands from bankrupt Arcadia Group, it couldn’t keep those retail store associates employed because it didn’t purchase any of the brick-and-mortar assets.
Boohoo has had its hands full over the past year. It has had supply chain issues that attracted scrutiny last year over alleged poverty wages and unsafe working conditions. And last month Boohoo co-founder and executive chairman Mahmud Kamani was ordered to appear in court for a deposition by a U.S. district court judge as part of a lawsuit filed in April 2020 alleging that the fast-fashion e-tailer’s perennial markdowns were akin to false advertising.