Boohoo boss denies founder has links to 'sweatshop' factories

The fast fashion company has vowed to tackle problems in its supply chain

The boss of Boohoo has insisted that the fast-fashion company's billionaire co-founder has no financial ties with suppliers linked to a “sweatshop” scandal in Leicester. 

John Lyttle was forced to issue the assurances following a report into the firm's supply chain by Alison Levitt QC that claimed that in two cases, members of the founding Kamani family had "an indirect interest in a key supplier, or a close personal relationship with the supplier, which did not appear to have been recorded in Boohoo’s compliance files”.

But Mr Lyttle, who joined the company last year, said: “I can be absolutely categorical that nobody in Boohoo owns any part of any manufacturer. I can be absolutely clear on that.”

A spokesman for Boohoo clarified that Mr Lyttle was referring to Boohoo employees, including Boohoo co-founder and chairman Mahmud Kamani, but did not include the rest of the Kamani family.

The internet retailer was plunged into turmoil in July when an undercover Sunday Times reporter visited a factory where staff were allegedly paid less than minimum wage.

Ms Levitt found no evidence Boohoo had broken the law, but said the company failed to take action fast enough and warned that its supply chain was likely riddled with bad behaviour from poor working conditions to serious fire safety violations.

Analysts at Liberum this week claimed that Ms Levitt had not looked thoroughly enough into the alleged financial interest Boohoo's founding Kamani family have in the Leicester factories. 

It came as Boohoo reported a spike in profits in the six months to September, shrugging off the controversy surrounding its supply chain.

Pre-tax profit jumped to £68.1m, up 51pc from a year earlier, as revenue soared 45pc to £816.5m. 

Boohoo has vowed to tackle the problems outlined in Ms Levitt's findings amid concerns the scandal could damage its reputation. The company said that negative perception of its brand is one of the biggest risks to its success.

Mr Lyttle said: "We have identified, we have accepted... that we should’ve gone faster in some of these areas of compliance but we’re absolutely committed to putting this right, and again, all those [report] recommendations, we’ve committed to implementing those."

Boohoo bought the Oasis and Warehouse brands out of administration during the period and acquired the remaining minority stake in PrettyLittleThing. 

While Boohoo's sales are still heavily focused on the UK, it enjoyed a sharp 83pc jump in revenue from the US during the period. 

Boohoo now expects revenue growth in the year to February 2021 to be between 28p and 32pc, up from the 25pc it had previously pencilled in. 

The shares were down 3pc at 378p in late trading.