Why Did This Happen?
The Sunday Times investigated the allegations of slave labor by having an undercover reporter attend Leicester’s Jaswal Fashions factory. They discovered that factory workers were only getting paid £3.50 ($4.42) an hour — less than half of the UK’s legal minimum wage of £8.72 ($11.00) per hour.
The factory is also under fire for operating during the lockdown without extra precautions regarding hygiene and social distancing. Video recordings taken by the undercover reporter have been deemed as crucial evidence.
The Damage Is Done
Boohoo claimed that they would end relationships with that supplier because their supplier broke the brand’s code of conduct. However, the company’s losses are costly, since £1 billion ($1.26 billion) has been wiped off the company’s value in just two days. Their shares have also fallen a further 12%, as well as a 16% slump.
Allegations against the fashion brand are currently under review, with the independent review being led by the Queen’s Counsel, Alison Levitt. To make up for the damage, Boohoo has committed to putting £10 million ($12.6 million) toward removing the supplier’s malpractice. However, the damage that has already been done will still be hard to come back from, as the fast-fashion brand still faces backlash across multiple social media platforms.
Before the investigation took place, Boohoo was already under fire for making sick workers continue to work. The fast-fashion brand claimed that they were going to look into the same factory that made COVID-19-positive workers still go to work.
Leicester was the first city after the UK's lockdown was lifted to go back into lockdown due to the spike of cases they had. This move was because most clothing factories and food-processing plants were making employees work with little social distancing, poor hygiene precautions, and a lack of sick leave.
Health experts recommend that those with the virus or symptoms stay at home at all times and avoid human interaction. Guidelines also recommend two meters (six feet) of social distancing, which led businesses to either close during the pandemic or work from home. Boohoo’s factory failed to carry out necessary precautions by not providing necessary personal protection equipment (PPE) to employees and still forcing them to work regardless.
Boohoo’s future appears bleak, as many consumers have been made aware of the scandal that involves modern slave labor. With users and influencers boycotting the brand, it will be hard for the company to revitalize itself.
Boohoo has 12 million Instagram followers, as well as 2.2 million fans on Facebook. In 2019, they had spent £90 million ($113.5 million) on marketing their brand and products. In our digital world, large and small businesses depend on influencers and celebrities to promote their products, as it creates engagement with regular users. Regular users depend on influencers who give feedback about products, for it comes across as a trustworthy practice. With Boohoo being boycotted, it’ll be hard to gain trust from consumers.
As consumers aim to buy from eco-friendly businesses with high sustainability, Boohoo faces pressure to adapt. Hashtags, including #BoycottBoohoo, are trending widely on social media. With the current allegations being made against Boohoo and the massive financial loss that the company has already faced, it will take a long time for its reputation to move forward.
About the Author
As an analyst of global affairs, Adriaan has an MSC from Oxford, with diverse interests in the digital economy, entertainment, and business. He is a specialist trainer in Advanced Analytics & Media.