Fast fashion group Boohoo is reportedly seeking a 10 percent discount from its suppliers in an effort to reduce supply chain costs. This demand applies to both delivered and undelivered clothing, encompassing all outstanding orders made by the retailer. The Times UK cited an unnamed supplier as its source, who claimed that Boohoo had contacted them "demanding" the discount.
This move comes as the British company, which owns brands such as Warehouse and Debenhams, faces weakening consumer demand amid the cost of living crisis in the UK. One supplier described the decision as "major self-harm," stating that Boohoo is "struggling to find suppliers and now they are screwing the ones they have." Last year, Boohoo had already stirred controversy among its suppliers by extending its payment terms from 30 to 60 days.
In addition to seeking discounts from suppliers, Boohoo has implemented other cost-cutting measures. The company is currently consulting on more than 100 redundancies in its ecommerce, buying, and design unit operating out of Soho, London. Furthermore, Boohoo is still working to overcome reports of poor working conditions among its suppliers that emerged in 2020, leading to a shake-up of the company's supply chains and governance.
Boohoo has also settled a $197 million court case in the US, where it was accused of faking discounts for customers through a "deceptive pricing scheme." Although the company continues to deny all allegations, it agreed to settle the lawsuit to avoid the uncertainties and expenses associated with ongoing litigation. As part of the settlement, Boohoo is now required to include a disclaimer stating that the product prices listed as 'reference' prices are not based on the original prices for the products.
These efforts to reduce costs come in the wake of falling sales, which Boohoo largely attributes to the cost-of-living crisis impacting the UK. In January, the company closed its Wellingborough-based distribution center, affecting 420 jobs, and plans to implement further job cuts at its head office in London have been reported by The Times.
