What’s the ethical impact of Boohoo and ASOS buying up well-known fashion brands?

Established high street names such as Debenhams and brands under the Arcadia Group including Topshop, Topman and Miss Selfridge, have been bought out by Boohoo and ASOS. Many people are concerned about the impact that some of these buy-outs may have for workers, the environment and consumers. 

Boohoo has bought Burton, Debenhams, Dorothy Perkins, Principles and Wallis. Boohoo is a fast fashion brand which was founded in Manchester in 2006, and targets a younger audience. Unlike ASOS, it makes the clothes it sells, with the vast majority made in Britain. They say they drop ‘over 500 new products a week’. The company receives an ethical rating of just 3 for its unsustainable and exploitative practices.

ASOS is a British online fashion retailer which was founded in 2000 and also targets a younger audience. According to their website they have 168 suppliers who use 713 factories around the world. They have acquired Miss Selfridge, Topshop and Topman, along with HIIT activewear. Although it receives a middling ethical rating of 7.5, ASOS is in fact a Recommended Buy in our High Street Clothing Shops guide - in stark contrast to Boohoo.

Who owns what now?

The brands that have recently been bought are shown in the table below. 

Ethical rating scores for brands bought out by Boohoo have plummeted. Burton, Dorothy Perkins and Wallis have seen their ethical rating halve as a result of the buy-out. 

For the brands taken over by ASOS, scores have not been so badly affected, and some may even have seen a marginal improvement to their ethical rating.

Boohoo previously bought Coast, Karen Millen, Oasis and Warehouse and already owns Pretty Little Thing and Nasty Gal.

Some previous big takeovers, such as SC Johnson’s buyout of Ecover and Method, have led to boycott calls.

Workers’ rights

In summer 2020, workers making garments for Boohoo in factories in England reported serious concerns of lack of hygiene measures for Covid-19, pay below the minimum wage, poor working conditions, and operating during local lockdowns. Workers were also not paid sick leave even if they had tested positive for Covid-19.

Around 40% of Boohoo’s clothing comes from UK factories, particularly in Leicester. The company has been in the news for many of these issues before, including over modern slavery in its supply chains.

Our review of Boohoo in 2019 found excessive pay for three Boohoo directors of over £1 million.  

The Government Environmental Audit Committee is revisiting its 2019 inquiry into fast fashion in order to include workers' rights in the review. It called the Boohoo executive chairman Mahmud Kamani to give evidence in autumn 2020. The Committee is recommending that Boohoo links its bonuses for senior executives to achievement of its new pledges on workers' rights and environmental sustainability.

Environmental issues

Boohoo has also repeatedly been criticised over its fast fashion model. Fast fashion is based on high turnover, multiple ‘seasons’, consumer demand for the latest trend, and cheap prices. This is at the expense of people and planet.

The company’s website states that it puts over 500 new products online every week. An item can go from design to sale in two weeks. On one day in April 2021 ‘new in today’ items include dresses for under £10 and leggings for under £7. Heavily discounted sale items included a bikini reduced to only £3. 

These clothes are not designed to last from one summer to the next. Such low prices and quick turnaround times imply Boohoo’s disregard for the planet and workers’ rights.

A huge amount of clothing is thrown away every year, adding to landfill problems. In the UK this is around 235 million items of clothes each year. Fast fashion feeds into this throwaway cheap clothing culture.

In addition, many garments use synthetic materials such as polyester, which is not only based on oil but also contributes to water pollution through release of the synthetic micro fibres when washed.

Tax 

We have previously covered Boohoo’s potential links to tax havens.

Its parent company, the Boohoo Group Plc, is incorporated in Jersey. It also owns ABK Ltd, a holding registered in Jersey, which sits just below the Boohoo Group Plc in the company’s structure. 

Although it has told Ethical Consumer that its UK subsidiaries are registered for UK tax and pay UK taxes on all profits, it is unclear why the Boohoo Group Plc is incorporated in Jersey, or what role ABK Ltd plays. This lack of transparency could facilitate tax avoidance in the future. Jersey is on our list of tax havens.