// Asos considers action against Leicester supplier after its factory was in breach of its ethical trading standards
// CEO Nick Beighton said one factory had been tagged as “red critical” in the last few months
Asos is reportedly mulling taking action against a Leicester supplier after finding its factory to be in breach of its ethical trading standards amid the Covid-19 crisis.
The online fashion retailer’s chief executive Nick Beighton said one factory had been tagged as “red critical” in the last few months under Asos’s ethical audit process, The Guardian reported.
He added that there is a need for urgent action over potential risks to workers or gaps in management systems.
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Asos currently works with about 30 factories in the UK, most of which are in Leicester, but supply less than two per cent of its products.
However, Asos’s management showed concern about the conditions at garment factories across the UK, especially after a recent report by labour group Labour Behind the Label and allegations of malpractice at suppliers to Boohoo and Quiz.
Beighton said its factory in Leicester had been visited by Asos executives last week and he would be visiting again on Friday before “making a decision accordingly”.
Moreover, Asos is likely to go through its established process for dealing with troubled suppliers, which involves laying out a plan to improve standards.
Beighton said Asos was particularly concerned about the effect the allegations of modern slavery would have on the whole online fast-fashion industry.
Asos said none of the Leicester factories it used also supply Boohoo.
Asos saw its sales rise during the Covid-19 lockdown and said it was on track to deliver “strong profit growth” on Wednesday.
The online fashion retailer recorded a 10 per cent increase in group revenue to £1 billion for the four months to June 30.
Asos’ international markets had accelerated retail sales as they rose 17 per cent to £654.1 million across the quarter.
Meanwhile, EU revenues rose by 22 per cent to £328 million.
That compared to a one per cent dip in sales to £329.2 million in the UK and a three per cent growth in the US, where sales totalled £124.9 million.
Moreover, Asos saw its active customer base grow 16 per cent to 23 million during the quarter, driven by new international shoppers using its platform during global lockdowns.
Asos said it would repay all money previously claimed via the furlough scheme to the UK government as employees return to work.
The group’s full-year profits are expected to come in at the top end of market expectations, but Asos said it remained “cautious on the short to medium term outlook on demand” as “restrictions remain in place”.