Boohoo has reportedly withheld payments to select suppliers due to quality concerns.
- Approximately 10 suppliers out of Boohoo’s 500 worldwide are affected by the payment hold.
- A three-month quality improvement initiative has been implemented to address faulty goods.
- Boohoo emphasises its commitment to premium quality, engaging suppliers to resolve issues.
- A significant revenue drop of 17% was recorded amid challenging market conditions.
Boohoo, a fast fashion retailer, is reportedly withholding payments from around 10 of its 500 global suppliers due to issues regarding the poor quality of supplied clothing. This decision has emerged from claims that the items received were substandard, leading the company to take contractual measures against these suppliers.
The situation is part of a broader three-month quality enhancement programme initiated by Boohoo in response to a noticeable rise in defective clothing from certain suppliers. According to an insider, these issues involved substantially high levels of faulty goods, prompting Boohoo to invoke its contract rights to delay supplier payments until quality levels are improved.
In a statement, a Boohoo spokesperson reaffirmed the company’s dedication to providing high-standard products to its customers. The spokesperson indicated that ongoing dialogues with a small number of supplier partners aim to rectify the quality issues to prevent recurrence.
This development follows Boohoo Group’s disclosure of a 17% decline in revenue for the fiscal year ending 29 February 2024, with total revenue falling to £1.46 billion. The company attributed this downturn to persistent market challenges, including elevated inflation rates and reduced consumer spending.
John Lyttle, CEO of Boohoo Group, commented on the financial results, acknowledging the difficult market conditions that impacted performance but noted that there was continued progress despite these challenges.
Boohoo is actively addressing the quality issues with specific suppliers while navigating reduced revenues in a tough market.
