UK: Boohoo withholds payments to suppliers, citing poor clothing quality
"Boohoo withholds supplier payments over poor clothing quality", 19 August 2024
Boohoo is in a dispute with suppliers after withholding payments, citing poor clothing quality.
The fast fashion retailer is said to be targeting manufacturers it claims are responsible for a significant amount of defective products and is refusing to pay until the issues are addressed, The Telegraph reported.
A source close to Boohoo described the action as part of “a three-month programme of work to improve quality following a marked increase in faulty goods being delivered by a small group of suppliers”.
“These involved very high levels of faulty goods” and Boohoo was “contractually entitled” to withhold money, the same source claimed...
Back in May, Boohoo’s losses ballooned to almost £160m as it encountered “difficult market conditions” caused by high levels of inflation and weakened consumer demand.
Sales were down 17% to £1.46bn in the year to February 29, which it said reflected its increased focus on profitability alongside the challenging market conditions.
The retailer is also gearing up for critical debt negotiations in the coming months as it seeks to persuade lenders to refinance over £300m in existing loans.
Both Boohoo and its creditors have engaged specialist debt advisers...
Boohoo was accused of squeezing suppliers in a BBC documentary last year. A Panorama investigation claimed an undercover reporter working at the company’s Manchester headquarters had seen evidence of staff pressuring suppliers to lower prices despite a pledge to overhaul its practices.
A spokesman for fast fashion group said: “Boohoo Group is committed to delivering product of the highest quality to its customers.”
“We are currently talking with a very small number of supplier partners where, unfortunately, the product supplied was not of a high enough standard. We are working collaboratively with them to remedy the situation and ensure this does not happen again.”