Asos considers action against Leicester supplier in ethical audit

Boss of online fashion retailer says factory tagged as ‘red critical’ in last few months

Asos is considering action against a Leicester supplier after finding the UK factory to be in breach of its ethical trading standards during the coronavirus outbreak.

Nick Beighton, the online fashion retailer’s chief executive, said one factory had been tagged as “red critical” in the last few months under Asos’s ethical audit process – flagging the need for urgent action over potential risks to workers or gaps in management systems. Beighton said Asos’s ethical team had been active throughout the UK’s coronavirus lockdown.

Asos works with about 30 factories in the UK, most of which are in Leicester, but supply less than 2% of its products. But the visit by Asos’s top management shows heightened concern about conditions at UK garment factories after a recent critical report by workers’ rights group Labour Behind the Label and allegations of malpractice at suppliers to Boohoo and Quiz.

Beighton said its unnamed Leicester factory had been visited by executives last week and he would be visiting again on Friday before “making a decision accordingly” about its future relationship with Asos.

He said Asos would go through its established process for dealing with troubled suppliers, which involves laying out a plan to improve standards and then regularly checking progress. Factories that fail to improve conditions after an agreed period are dropped.

Beighton said the visit was part of normal working practice at Asos, and that the company has thorough measures in place to prevent malpractice in its supply chain.

These include training buyers to check whether a factory can meet the order without outsourcing to unapproved suppliers, publishing a full list of factories and running a phone line for whistleblowers in the supply chain. Beighton said Asos was considering whether to publish its regular audit results.

“We believe in transparency. It demonstrates control of the supply chain,” he said.

Beighton said Asos was concerned about the potential effect on the whole online fast-fashion industry of allegations of malpractice in Leicester factories supplying Boohoo and Quiz which have emerged in recent weeks. Asos said none of the Leicester factories it used also supply Boohoo.

His comments came as Asos said that profits would hit the top end of market expectations this year after the online fashion retailer’s sales of casual and active wear surged during the coronavirus lockdown.

The company, which targets the “20-something” fashion market, reported a 10% year-on-year sales rise to just over £1bn in the year to the end of June. Asos said it attracted 6% more shoppers during the lockdown taking its total to 23 million, with particularly strong growth in new international customers.

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Asos will repay furlough support which it initially claimed from the UK government for April. While sales at the group fell by up to a fifth when lockdown measures were introduced in March, they have since recovered.

Beighton said: “This has been a tough time for all businesses but we have remained focused on doing the right thing for our people and our customers and making sure that we emerge from the current crisis as a stronger and better organisation.”

Contributors

Sarah Butler and Mark Sweney

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