Written evidence submitted by Boohoo Group PLC
We would like to thank the Environmental Audit Committee for inviting boohoo group to discuss the environmental impact of the fashion industry and the wider supply chain and concerns that the buying practices of retailers are pushing manufacturers to pay garment workers illegally low wages.
Boohoo group is a fast growing fashion company established in 2006. Our brands boohoo, boohooMAN, PrettyLittleThing and Nasty Gal deliver value for money fashion for the youth market aged 16 to 30. Of the £36bn spent annually on ladies wear in the UK, the boohoo group represents approximately 1 per cent of this volume.
We acknowledge our responsibility and duty to the people involved in the creation of our products and the wider environmental impact of everything we do. We are committed to continuing to drive improvements and demonstrate our commitment with the answers to the questions put by the Committee.
Key points we would make are:
1a) How do you currently ensure that all the garment workers producing the clothes you sell are paid at least the minimum wage?
We take the following steps to ensure that all our suppliers pay their staff at least the minimum wage:
1b) Do you allow your buyers to order garments from UK suppliers at any price, or do you educate them on the cost of UK labour and material so that they are aware when a price is ‘too cheap’ to be made without breaking employment law?
We do not allow our buyers to order garments from UK suppliers at any price. Utilising our partnership approach, we have developed strong and long-standing relationships with our suppliers who are able to lawfully produce affordable garments.
Part of the reason we are able to offer products at such good prices for our customers is that we are able to leverage on our strong brands to offer promotions and special price points across certain product ranges. This pricing activity forms part of our marketing strategy and means that when boohoo group invests in product, price and promotion, the supplier’s margin is not compromised. The average selling price per garment at boohoo group remains consistently above market average, which is in slight decline on the year, whereas the average selling price across boohoo group is in growth.
The buying team work closely with our sourcing and compliance team, which has implemented a number of initiatives (which are set out above in response to question 1) to drive supplier compliance with relevant law and regulation. In respect of our buyers, they are experienced within their field and aware of the costs of garments and what is required to develop or stock buy a product. We have developed a training module which allows buyers to understand the costings of a garment, ensuring a garment is produced in such a way that legal requirements are met whilst remaining cost-effective. The buying team are encouraged to raise any concerns relating to suppliers with the sourcing and compliance team, who are able to investigate further.
We offer our customer trend led fashion pieces together with wardrobe staples. Our product ranges include premium, party, jumpsuits and playsuits, outerwear, denim, fitness, maternity and swimwear. We have over 11 million active customers and the average customer will place around 2.5 orders per year and will order around 3 items per order. The inference we draw from this is that our customer is ordering products which she frequently wears, particularly the wardrobe staples which we believe are frequently worn and styled with trend led fashion pieces. This is consistent across the fashion industry.
It is however impossible to quantify the life-cycle of garments as this is entirely dependent on a number of factors, some of which are out of our control. For example, the type of garment, how often a garment is worn, the purpose for which it is worn and the way in which the garment is washed.
We do encourage our customers to re-wear garments through our ‘ways to wear’ videos which we share on social media. These videos help our customers style a garment across a number of different outfits. We recently worked with an influencer to encourage different ways of wearing a single garment. We are also working on an advice note to customers on the most efficient way to wash clothes and improve a garment’s life-span.
In respect of the design and testing process, our suppliers are expected to adhere to garment performance standards which test and demonstrate the physical, performance and product safety requirements. Our teams work closely with our suppliers to ensure quality expectations are met and quality fabrics are sourced and used to increase the life-span of garments. We also test product from a fit or sizing perspective. Garments are sent to third party testing houses and we also undertake our own in-house wash tests.
Our returns rate is consistently below industry standard which supports our belief that we are taking relevant steps from a design and testing perspective.
We recognise that our supply chain is an integral part of our business and that our supplier’s businesses will have environmental and social impacts. We pride ourselves on the fact that nearly half of our products are manufactured in the UK, which dramatically reduces the carbon footprint of our garments in their journey to our customers, particularly as a significant proportion of our customer base is also located within the UK.
Our Burnley warehouse is a zero to landfill operation, with all cardboard, plastic and other waste being recycled; stock is rarely destroyed but any wastage is shredded and sold to create energy from waste; any plastic wastage that cannot be recycled is processed to create pellets that are then used in the manufacture of bin liners.
Our sourcing and compliance team based in Leicester have a good relationship with Leicester City Council and we meet regularly with the Council to discuss various matters and share best practice. Leicester City Council recognises the influence of the boohoo group within the industry, and Leicester, and shares its ideas for best practice with boohoo group to subsequently feed into the supply base. Building on our partnership approach, we work with our suppliers to share this best practice, drive improvement and reduce the environmental impact of the products we sell.
Other key steps include:
Our Nasty Gal brand has a vintage collection that recycles old clothes into current styles. Each product within the range is made from vintage material and is completely one of a kind.
The fashion industry and the brands that operate within it have a responsibility to make fashion available to customers across various price points. Currently, the fashion brands that have successfully utilised recycled materials across product ranges tend to operate at a higher price point than the boohoo group. We recognise the excellent work that some of these brands are doing in utilising and reusing recycled materials. We also recognise that there is an opportunity for the brands across the boohoo group to do more to use recycled materials in our products.
We believe that there is an opportunity for the government to invest in research funding in the fabric development industry. Investment in research at the source of the supply chain may drive behaviours to improve the availability of sustainable fabrics and increase the use of recycled materials, making them more accessible for high street retailers and online fashion brands at the lower price point end of the industry. Further, investment into research to drive improvements in digital print technology could result in reduced excess stock.
We recognise that all parties, retailers, online retailers and the government also have a responsibility to educate consumers and raise awareness of this increasing environmental issue. We believe this could be achieved by introducing further initiatives at a local level to facilitate and build awareness of the need to recycle clothing.
boohoo group has banned the import and sale of cosmetic products that contain microbeads. We are also working on initiatives to educate our customers on the topics of discarding and washing our garments as part of our commitment to improve the sustainability of garments sold by us, which inevitably has an impact on micro plastics.
We are in conversations with a plastic research company to review our plastic use and seek new ways to reduce the environmental impact of our products.
In a competitive environment we deliver on-trend product at affordable prices. We are a fast fashion business and strive to offer the best value for our customers. This does not mean our garments are disposable. As we have mentioned, the average order frequency of our customer supports this position.
The youthful demographic of our customer means that education is key and our huge reach across all our social channels globally help share ideas of how to wear our garments many times. We do this through our ‘Ways to Wear’ videos, guides and posts.
We have recently launched our ‘boohoo editors’ campaign across social media. The ‘editors’ are boohoo employees, who are encouraged to post images of boohoo garments and share their own style inspiration. Again, this encourages our customer to take inspiration from different styles and educates the customer to style the garment in different ways.
We also work with influencers to help educate our customers on sustainability and environmental impact. Further, we have plans in place to introduce content across our social channels which will encourage our customer to recycle clothing and adopt other ethical practices.
We are supportive of initiatives to drive improvement of customer behaviours. We partner with reGAIN and have joined its ‘recycling revolution’. reGAIN recycles clothes and aims to make the process easier, faster and more efficient. reGAIN rewards recycling by encouraging consumers to turn unwanted clothes into discount coupons and diverts unwanted clothing from going to landfill in doing so. This relationship is promoted on our websites and we are committed to increasing the visibility of this relationship and encouraging our customers to use it.
We also manage our stock and end of line fabric in a number of sustainable ways. Stock that can be reused as clothing is de-branded and sold in secondary markets. Damaged stock is recycled and certain fabrics from the recycled stock can be upcycled. Fabric samples are donated to local universities and are used by students.
boohoo group is encouraging its employees to join in the conversation on sustainability within the fashion industry. Sustainability and the use of recycled materials is regularly discussed at plc board level. It is also an agenda item for our junior board, made up of representatives of our young employees.
boohoo group does not incinerate unsold or returned stock. Unsold or returned stock which we are not able to sell online is de-branded and sold to a secondary market for onward sale. We also work with a specialist third party recycling company and operate a ‘zero to landfill’ policy with any further unsold or returned stock which is not sold into the secondary market.
We often donate surplus stock to charities and we hold internal sample sales for surplus stock, the proceeds of which are also donated to charity. In 2017 we donated approximately 80,000 units of product resulting in an estimated £110,000 worth of sales in charity shops.
The terms and conditions with our suppliers do allow for refund payments in the event that the supplier provides boohoo group with defective products.