BBC Panorama accuses fast fashion chain of pressuring suppliers to slash prices even after deals are reached

• Claims made in BBC Panorama’s ‘Boohoo’s Broken Promises’ programme

Boohoo has been accused of breaking its promises to make its clothes fairly and ethically amid a £100million lawsuit following allegations of modern slavery in its Leicester workshops. 

A BBC Panorama undercover investigation at the fast fashion giant’s Manchester headquarters discovered one member of staff was lying to suppliers to drive down costs and there was constant pressure to slash prices. 

It comes amid a £100million lawsuit brought by sovereign wealth funds, local councils and other investors, following the revelations in 2020 that staff were working in awful conditions at its workshops in Leicester and being paid just £4 per hour.

The company had hired Alison Levitt KC to carry out an independent review with a damning report concluding bosses at Boohoo had known about the issues over low pay and poor working conditions at their Leicester clothes factories for months. 

The report concluded that the situation in Leicester was not allowed to worsen deliberately but was instead the result of ‘weak corporate governance’. Levitt said that Boohoo had ‘made a significant start on putting things right’ and noted that there was no evidence that the company had committed any criminal offences. 

Boohoo had promised to change its practices through its ‘Agenda For Change’ programme after the scandal was uncovered three years ago, which was branded a ‘success’ by retired High Court judge Sir Brian Leveson. 

The company used to be worth in the region of £4 billion but this has now shrunk to just £385 million. 

Boohoo told MailOnline in response to the BBC Panorama programme it has not ‘shied away form dealing with the problems pf the past’ and that it had made ‘a number of improvements’. 

READ MORE: Boohoo faces £100m lawsuit over ‘modern slavery’ scandal at Leicester workshops that exposed how staff worked for as little as £4 an hour in poor conditions and wiped more than £1bn from its value

Undercover BBC Panorama reporter Emma Lowther spent 10 weeks at the fashion retailer’s headquarters in Manchester and found one staff member openly say they are lying to bag cheaper deals by going ‘in low’ during negotiations with suppliers and telling them they can get it cheaper elsewhere. 

One senior manager struck an ‘extraordinary deal’ to get midi dresses made for £1.80 in Pakistan leaving another employee baffled.      

‘Well I actually don’t know how he’s doing it. He [the supplier] must be actually losing money it’s so cheap, for a midi dress as well,’ the staff member said. 

While there was pressure to cut prices in order to save the company money and even amending prices after deals had been struck with stock already being made. 

One supplier was left fuming when a 10 percent discount appeared on a deal they hadn’t agreed to which would leave them out of pocket as they’d be working under cost.  

During one staff meeting, the investigation found new orders were not allowed to be signed off until Boohoo’s boss Mahmud Kamani had given his seal of approval. 

Boohoo told MailOnline: ‘Boohoo has not shied away from dealing with the problems of the past and we have invested significant time, effort and resource into driving positive change across every aspect of our business and supply chain.

‘We have made a number of improvements, including strengthening the ethical and compliance obligations on those wishing to supply Boohoo, regularly publishing our full list of approved global manufacturers, responsibly exiting from relationships with suppliers where standards are found to have fallen short, supplementing audit processes with regular unannounced checks and more. 

‘The action we’ve taken has already delivered significant change and we will continue to deliver on the commitments we’ve made.’

City lawyers are now demanding compensation for shareholders in Boohoo, who suffered financial losses after the scale of the Leicester workshop scandal became known.

Although no official case has yet been filed, Boohoo has instructed lawyers at Herbert Smith Freehills to try and halt the pending litigation, the Telegraph reported.

Issues at Boohoo had been raised as early as 2017 by Channel 4, with the BBC and the Guardian reporting on specific problems in the chain’s Leicester factories. 

Last year, an undercover reporter for The Times made a series of disturbing claims about conditions at its warehouse in Burnley, with staff made to work in temperatures of up to 32C over 12-hour shifts where they are expected to collect 130 items an hour. Employees also made allegations of racism and sexual harassment.

Pictures from within the warehouse’s long corridors lined with cardboard boxes revealed messages left by desperate staff, including ‘prison’ and ‘do not work here’. 

Justin Madders, Labour’s shadow minister for employment rights and protections, described the claims at the time as ‘shocking’.

‘The government has repeatedly failed to deliver their promised Employment Bill to tackle conditions in warehouses run like Victorian workhouses,’ he said.

Boohoo said it was taking ‘every claim very seriously’ but ‘does not believe the picture painted is reflective of the working environment’ at the warehouse.