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HIGHLIGHTS
- Boohoo in its first-ever Economic Impact Report announced, plans to invest £500 million to grow its customer base in the UK and international markets.
- The company plans to create over 5,000 new jobs across purchase, technology, human resources, and logistics divisions.
- According to the Economic Impact Report, Boohoo Group’s operations have added about £2 billion in GVA to the country’s economy since 2009.
UK-based fast-fashion retail company Boohoo (LON: BOO) in its first-ever Economic Impact Report announced plans to invest £500 million to grow its customer base in the UK and international markets. The company would use the funds for the development of smart technology solutions to increase operational efficiency, and expand warehouse space.
Investment to drive creation of 5,000+ new jobs
The fashion retail giant that acquired brands such as Wallis, Debenhams, and Dorothy Perkins in 2021, announced the creation of about 5,000 new job opportunities as a part of its expansion plans. As of January 2021, Boohoo’s total employee count stood at 3,208. A majority of the new job roles of the company will be based out of the UK, spreading across divisions such as purchase, technology, human resources, and logistics. The multi-million investment is a part of the company’s strategy to streamline and raise supply chain standards. The move would involve reducing the number of stakeholders in the Manchester-based retailer’s supply chain. Boohoo shares are currently trading at GBX 278.80, down by 1.14%, as of 2:41 13 August 2021. The company’s market cap stands at £3,566.04 million.
Boohoo also disclosed that the group’s operations in the financial year 2020/21 added gross value added (GVA) worth £559.4 million to the UK (supporting about 8,050 full-time jobs), which equates to around 4.4 per cent of the country’s total clothing and footwear retail sector. According to the Economic Impact Report, Boohoo Group’s operations have added about £2 billion in GVA to the country’s economy since 2009.
In its report, Boohoo highlighted that such strategic investments will not only aid in the development of the company through the expansion of its customer reach in the UK and international markets, but also aid in improving its global fashion e-commerce reach beyond geographical barriers.
Regional impact
Boohoo also stressed on uniform regional operational growth, with 94% of the company’s jobs and economic benefits taking place outside the capital city of London. Burnley houses the company’s international distribution facility, and Manchester is where its head office is based. Across the North West region, Boohoo contributed £309 million in GVA to the regional economy.
Slave labour allegations
In 2020, Boohoo’s reputation was hit by the allegations of slave labour in the UK third-party factories engaged in manufacturing clothes for the fashion retailer. The staff accused the company of paying less than half the minimum wage requirements at a Leicester clothing factory.
According to a report by The Sunday Times, workers at the factory were being paid wages in between £3.50 and £4.50 per hour as against the Britain’s minimum wage requirements for those aged over 25 years, set at £8.72 per hour. The company responded by cutting down a number of suppliers under its 'Agenda for Change' programme aimed at inculcating best practices. Boohoo also assured close monitoring of suppliers and their operations and urged workers to raise a flag in case of abuse via its helpline.
Way ahead
In response to the reopening of the economy and relaxation of other COVID-19 pandemic related restrictions, Boohoo announced investments to expand operations, while focusing on ethics and best practices. Additionally, the investment is in line with the fashion retailer’s strategy of expanding footprint in domestic, international and e-commerce marketplaces.
