LEICESTER – This week we reached out to PR, image, and crisis management experts to ask about the reputational impact of the Leicester garment industry scandal on fast fashion brand Boohoo. The Manchester company has seen its share price tank by more than 30 per cent since reports emerged that many garment factories in Leicester pressured their workers to work during lockdown.
Boohoo is by far the biggest clothing buyer from Leicester, and is heavily dependent on suppliers there to feed its ultra fast fashion business model.
Last week, a damning report by NGO Labour Behind the Labour found that while the UK was in lockdown, employees at factories supplying Boohoo were told to turn up at work despite being sick with coronavirus. Other workers who felt unsafe going into work due to a lack of social distancing were told they would not be paid if they did not turn up.
Meanwhile, under-cover reporters have established that many workers at factories supplying Boohoo were being paid as little as £3.50 per hour while their bosses abused the UK’s staff furlough scheme by pocketing money which was meant to go to furloughed staff.
Asos, Zalando and Next have all dropped Boohoo clothing from their websites in a bid to distance themselves from the revelations in Leicester. Likewise, several influencers have also cut ties with the brand.
Boohoo has now launched an official enquiry and is spending £10m looking into the issue …
What our experts told us:
Lauren Lunn-Farrow, a leading PR practitioner and MD of The Expert Agency: “The speed at which Next, Asos and Zalando have dropped Boohoo over the exploitation claims show the severity of these allegations. With the suspensions in place pending the outcome of Boohoo’s investigation the damage of these allegations for the Boohoo brand are catastrophic. These are serious allegations and the rate at which Next, Asos etc have quickly tried to distance themselves from Boohoo will have disastrous knock on effects for consumer’s trusting the BooHoo brand. It would be near on impossible for the brand to bounce back to pre allegations success.
Erica Wolfe-Murray, leading business expert and author of ’Simple Tips Smart Ideas’: “Boohoo will struggle to recover whilst there is widespread condemnation and coverage of its practices. But it has helped create a fast-fashion monster that needs feeding continually. “As a society we have to kill the monster ensuring that this type of business doesn’t just damage people’s lives (no-one can live on earnings of £3.50 per hour) but also is damaging the planet. Has the pandemic moved us far enough along that spectrum to prevent Boohoo’s re-emergence or the growth of a similar model? I would like to say ‘yes’ but think the answer is probably ’no’.
“The Boohoo name is toxic but I have no doubt we will see this company re-emerge under a different name.”
Andy Barr, CEO of http://www.10Yetis.co.uk: “The Leicester revelations have done nothing but harm the Boohoo brand, but the damage done could well be fleeting and short-term. There is no question that they will hire a crisis communications professional and come back with a newly designed ethical practice, as well as vastly improved working conditions for staff. Moving forward it’s likely they will turn their focus to positive movements, such as an environmentally friendly campaign, to reinstate their tarnished name. They have large amounts of money behind their brand and they will be ready to spend big in order to protect their reputation as much as possible.
“As with most scandals, it will cause outrage in the first instance but after time passes many may forget because the demand for fast fashion is still so high, unfortunately.”
Tom Bestwick, PR and outreach specialist at digital agency Hallam: “This is incredibly damaging news for Boohoo, but it’s how they immediately respond that will determine the impact of that damage and from that point, they have taken important first steps by ordering an internal investigation into their supply chain practices.
“More, however, is still required and what the community is looking for is Boohoo’s stance on this allegation and what the business’ plans are to ensure this never happens again. It’s going to take more than a sincere statement that both recognises and apologies for the deplorable issues raised. There has to be a commitment for future change and the community is going to want to know what that is.
“This is in no way a short-term fix. Some of that customer base will not return to Boohoo, regardless of what they say and do, but enforcing such a plan will allow them to start building bridges with a view to rebuilding their reputation over a long-term timescale.”
Stephanie Driver, PR and comms consultant who specialises in corporate reputation management: “We are in the era of conscious consumerism, where people increasingly choose to buy from companies who can demonstrate sustainability and ethical business practice. Companies not only now have a moral and legal obligation to ensure their supply chains are fair and transparent, but as Boohoo has shown, they have an obligation to their bottom line.
“Authenticity trumps brand. BooHoo’s handling of this crisis has so far been on track – they’ve owned it, with no obfuscation and have made a robust commitment to investigate. They have a fighting chance to salvage their reputation, but that window is small.”
Sarah Riding, retail supply chain partner at law firm Gowling WLG: “Despite Boohoo now taking strident steps to audit its supply chain partners, the need for this to be a core part of their business management strategy moving forwards could not be more pertinent to their growth plans – their recent pledge to acquire failing retailers in order to assimilate them into their operations brings a host of new supply chain challenges that won’t be met without consistent reviewing of practices, endorsed at board level.”