Online fashion star Boohoo has announced plans to create 5,000 jobs over the next five years, as it battles back from criticism over poor working conditions at suppliers.
The fast-growing retailer, which recently bought the Debenhams brand, said jobs will come from a £500million growth programme, as it expands its warehouse and builds new IT systems.
Jobs are expected to be created at both its head office in Manchester and warehouse in Burnley.
Boohoo’s boss has also said that it will try to improve the environmental impact of fast fashion by making at least 20 per cent of its clothes sustainable by autumn and 40 per cent by next spring.
Boohoo co-founders Mahmud Kamani (left) and Carol Kane (centre) with boss John Lyttle (right). The online fashion retailer will create new jobs over five years
The announcement came as Boohoo published a report on its positive economic impact on the UK.
It claimed that Boohoo added £559.4million to the economy in the past year, meaning the business now accounts for 4.4 per cent of the total UK clothing and footwear retail sector.
The fashion retailer also claimed it supported 8,050 full-time roles and that for every job created by Boohoo and its brands, a further 1.7 were added to the wider economy.
The storm over suppliers and concerns over fast fashion’s environmental impact have weighed heavily on Boohoo shares at a time when screening for Environmental, Social and Governance attributes are all the rage in the investment world.
Boohoo shares rose 1.8 per cent this morning, or 4.9p, to 270.8p but remain well below their peak of just over 400p last summer.
Boohoo has been trying to shed its negative image following revelations that some of its suppliers in Leicester had been operating in sweatshop conditions.
Last summer, two of its factories in the UK were accused of poor working conditions and of paying as little as £3.50 to £4 an hour to workers producing its clothes.
The group has cut ties with hundreds of its suppliers since then, and pledged to link multimillion-pound bonuses for its directors with improvements in its supply chain.
But some shareholder groups and investors remain dissatisfied, with over 20 per cent of votes opposing the company’s remuneration report at its annual general meeting in June.
Some 12 per cent of votes were also cast against the re-election of co-founder and executive director Carol Kane.
Paris Hilton, Jasmine Tookes, Romee Strijd, Elsa Hosk and Josephine Skriver at a Boohoo party
Over the past year, Boohoo has snapped up a series of failed high street names, including Coast, Karen Millen, Dorothy Perkins and Debenhams.
In 2021, they bought two new warehouses, one in Wellingborough and one in Daventry, both of which give the group an additional 1.845million square feet of space and support over 2,000 jobs, it added.
In logistics alone, the group employs 7,000 people at four distribution centres in the UK and ships between 190,000 and 230,000 parcels a day, which are handled by 13 main courier companies and supported an estimated 1,660 jobs in the last financial year, it said.
In the report, it also claimed that it moved over 1,400 agency colleagues from its warehouse teams onto permanent boohoo contracts in the last financial year.
Boohoo has released a positive impact report after coming under fire for claimed poor working practices at its suppliers (Pictured: Emma Claire attends the boohoo Black Friday gifting suite last year)
Sustainability has also become a key talking point in the sector, with shoppers opting to keep items of clothing for longer and move away from so-called ‘throwaway fashion’.
Speaking to BBC Radio 5 Live’s Wake Up To Money podcast, chief executive John Lyttle said sustainability will take several years to achieve.
He said: ‘We’re trying make the journey as sustainable as possible… 20 per cent of all our ranges will be sustainable this autumn… 40 per cent next spring/summer.’
He added: ‘They’re not going to be fixed in six and 12 months… It’s the same 2030 timeframe as combustible engines.’
Sustainability concerns: CEO John Lyttle said sustainability will take several years to achieve
However, there is no mention of this in its latest report ‘Agenda for Change’ published today.
However, Noelle Hatley, senior lecturer in fashion business at Manchester’s Fashion Institute, told the BBC that brands were able to use the term ‘sustainable’ because there was ‘no industry-wide agreement on its meaning’.
‘40% is a reasonable target, but it all hinges on what they mean by sustainable and how much information they will actually share with the customers,’ she said.
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