Process Management 2 mins read

Supply chain booboo for Boohoo

The Boohoo scandal may well be a watershed moment for fast fashion – in a similar way to the 2013 horse meat scandal was for grocers.

Oliver Guy Oliver Guy

There is an old expression in business: “Don’t do anything you wouldn’t want to see on the front page of the WSJ business section.“

So when fashion retailer Boohoo woke up to see headlines about the treatment of workers in one of its UK factories, it had to act fast. With its reputation at stake and its share price plummeting, Boohoo took immediate action and appointed a senior QC to investigate its supply chain. It also promised to spend around £10 million to strengthen its compliance auditing processes and invest in improving conditions in the factory.

The Boohoo scandal may well be a watershed moment for fast fashion – in a similar way to the 2013 horse meat scandal was for grocers. I expect to see retailers making announcements around plans to audit supply chains in the coming weeks, along with affirmations that workers in their supply chain are not being exploited.

The lesson learned here is that without visibility into your supply chain links, you are in danger of becoming the next Boohoo. Trust and ethical practices are increasingly important in today’s retail landscape. Younger demographics in particular want to buy products from brands which resonate with their own core values. One of these – a big one – is that the products are ethically produced.

Retailers will need to have processes in place to help them live up to their brand promises and a key part of this is the ability to ensure appropriate governance and risk management. They need to have processes that proactively look out for issues, ensuring they are followed by every supplier and every member of staff – and that results can be audited.  

Boohoo took the issues seriously and is now expected to stick to its commitments, or risk influencers and consumers continuing to boycott the brand. Actions must be visible and they have to communicate their processes and steps and genuinely acknowledge the error they made.

The fashion industry (and others) must ensure this will never happen again.