Boohoo's business model sparks debate on fast-fashion worker pay - Business Insider

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A workers' rights group says Boohoo's cut-price business model only turns a profit if workers are paid criminally low wages. Analysts disagree.

into its supply chain. Critics say that won't get to the root of the problem. They say these issues stem from Boohoo's purchasing practices, and that its fast-fashion, cut-price business model only turns a profit if workers are exploited — but analysts disagree.Boohoo said the factory in the Sunday Times report had been subcontracted by one of its suppliers. It has now cut ties with this supplier, and said it will invest £10 million "to eradicate supply chain malpractice.

"Labour Behind the Label is making this statement but they haven't done the math to prove that out, but neither has Boohoo said: 'This is how we make our money.'In its report, LBL said that small-batch orders with a quick turnaround — common requests from fast-fashion brands such as Boohoo — encourage unauthorized subcontracting as suppliers race to meet deadlines.

. She quoted one supplier who described Boohoo's meetings with suppliers as being like a "cattle market." , which said that it has not yet found any evidence of modern slavery offenses at Leicester factories in its early investigations. Anne Critchlow, an analyst at Societe Generale, in a note to clients on Wednesday explored the question of whether Boohoo's business model and margins rely on illegal wages. She concluded that they did not.

 

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'Workers say that cut-throat business models are cutting their throats. Cut-throat business experts say their throats are not cut. There is no way to know for certain whether or not cut-throat business is cutting throats.'

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