Boohoo’s sales are booming but the price we all pay for fast, cheap fashion is too high

Boohoo has made commitments to address issues with its supply chain and the sustainability of its wildly popular clothes but critics say it has a mountain to climb to hit its targets, so the pressure for improvement must be kept up, writes James Moore

Boohoo’s revenues surged by 32 per cent when compared to a very strong first quarter this time last year (Reuters)

Cheap clothes are produced at high cost to everyone, which is why Boohoo’s rising sales could be said to represent a rising problem.

The pace at which they’re growing might even leave even one of those shouty Peloton instructors, featured in the fitness firm’s Google ads, breathless.

The online clothes retailer, which has taken on brands such as Debenhams, Dorothy Perkins and Burton, said revenues jumped by 32 per cent in the three months to the end of May to land at an impressive £486.1m.

The City’s response was “meh”, which is very typical of the City. Some analysts groused about the group’s “conservative” full year forecasts not being updated while paying rather less attention to the fact that the corresponding three months last year were exceptionally good. The group has, in fact, more than doubled UK and US sales over the past couple of years. In the City, too much is never enough.

Elsewhere, however, the problems caused by fast fashion are very much in focus. Earlier this week, the Royal Society of Arts, Manufactures and Commerce, the social change charity, produced a sharply critical report on the sector. It lambasted an industry which it described as “awash in new plastics”.

Boohoo was, meanwhile, singled out as having a “mountain to climb” to meet its own sustainability targets. Among those targets are for all polyester and cotton to be “recycled or more sustainable” by 2025 and for “over half” the group’s cellulosics to come from “more sustainable sources”.

Set against that, the report found that 60 per cent of recently listed items were “entirely made from virgin plastics”.

Taking in the turbo-charged sales growth, the Society’s characterisation looks entirely apt. That mountain could be of Himalayan height.

More generally, the report raised concerns that a significant proportion of the cheap-as-chips gear sold by this industry is destined to end up in landfill. The latter is just one of the ways through which the price of fast fashion is levied on society.

Using more sustainable fabrics is the not the only issue facing Boohoo. It has also come under fire over the treatment of workers in its supply chain. A scandal erupted last summer over poverty pay and squalid conditions faced by staff at one of its UK suppliers, with rates as low as £3.50 an hour quoted. That, needless to say, is well below the UK’s minimum wage. Issues have also been raised about the pay of overseas workers.

The subsequent furore saw MPs getting involved via the Environmental Audit Committee, and it drew a response, with the company promising to do better through the launch of what it calls its “Agenda for Change” programme.

The third report on the latter, by retired judge Sir Brian Leveson, was released alongside the trading update and it should be noted that his comments were largely complimentary.

He said: “In my numerous discussions with … directors and managers at Boohoo, I remain encouraged by the determination of all to address the issues which were exposed last year and to both promote and embed a new way of working to the highest ethical standards.”

Trouble is, while the judge’s words were good to hear, the appetite among Boohoo’s customers for its product doesn’t appear to have been overly dimmed by the whiff of scandal that’s surrounded the company. That means the risk of backsliding is clearly there. Sales are ultimately what move mountains for big, fast-growing businesses.

It’s notable that, in his concluding remarks, Sir Brian made note of the need for “continuous investment of time and effort in order to embed the imposed business changes as permanent”.

The best way of ensuring that these changes are forthcoming is for the pressure on this company to be kept up, both from people like Sir Brian but also externally through researchers like those who produced the Royal Society’s report, as well as MPs and the media.

The price we all pay for fast fashion must be brought down.