Boohoo has ordered its suppliers to ensure all its products are made in-house as it continues to make major changes to its supply chain.
The online fashion giant has told its Leicester-based suppliers, which account are understood to produce around 40 per cent of its garments, to cut ties with sub-contractors and third-party producers.
According to an email to suppliers seen by the BBC, Boohoo has given them until March 5 to stop using outside labour.
Suppliers without the “expertise or knowledge” to run a factory, must buy a Cut, Make and Trim (CMT) manufacturing unit, Boohoo said.
It added that while suppliers could reach out to discuss the new measures, this was a “mandatory requirement and not open to negotiation”.
Suppliers have raised concerns that this will lead to increased costs, forcing them to hire new workers and rent more space.
The move comes in the wake of a bombshell investigation into 62 of Boohoo’s suppliers which was published by Alison Levitt QC last year.
It found various health and safety violations, cases of failed payment of wages, failures in recording of hours and identity verification and potential furlough fraud.
Levitt recommended that Boohoo “should reduce its approved suppliers to a list which contains a manageable number of companies, ideally without reducing capacity” with “the goal of reducing and ultimately eliminating sub-contracting.”
“One of the key recommendations from the Alison Levitt QC review was to consolidate our supply chain,” Boohoo told the BBC.
“Supporting suppliers to bring their CMT units in-house shortens our supply chain and is just one of the ways that we are helping them to build stronger more sustainable businesses that can thrive.”