Mahmud Kamani, the 56-year-old co-founder of fast-fashion giant Boohoo, has been ordered to give video evidence in an American court this August. The company is accused of offering fake discounts on clothes never sold at the original price to drive sales. It denies the claims, and Kamani’s lawyers say he wasn’t involved. The case has turned up his emails to the marketing department that include lines such as: “WTF, why are we putting branding ads out without a massive offer.”
WTF indeed. How did Kamani get started?
In the beginning there was Abdullah Kamani. He and his wife moved to Manchester from Kenya in the 1960s and he sold handbags on a market stall. Then he launched a family textile business supplying brands such as New Look and Primark, and ended up driving a Rolls-Royce. His son Mahmud did even better – he launched Boohoo.com in 2006, churning out online fast fashion for the under-30s. It’s now valued at £3.4bn – more than M&S – and Mahmud is worth £1.4bn, according to The Sunday Times Rich List. Two of his sons, Umar and Adam, co-founded the subsidiary label PrettyLittleThing in 2012. It’s worn by influencers of all stripes, from Love Island also-rans to the Kardashians.
And now Boohoo’s buying up failed high-street brands?
Indeed. It snapped up Dorothy Perkins, Wallis and Burton from Philip Green’s failed Arcadia group in February for £25.2m – online only, no bothersome stores. Money for old rope? With sales of about £180m a year, the deal was seen as a bargain. It bought Debenhams for £55m in January and Oasis and Warehouse for just £5.25m last June.
That’s a lot of retail therapy for one family – but isn’t the brand slightly tarnished?
Its supply chains have been less than squeaky clean. In 2017 Channel 4’s Dispatches found that factories in Leicester supplying Boohoo were paying workers less than the minimum wage. The company said this wasn’t its fault, and that it was working with suppliers to raise standards. Last June the workers’ rights group Labour Behind the Label reported that factories supplying Boohoo were not following social distancing rules and were forcing sick employees to work. The firm denied the claims. Weeks later The Sunday Times alleged that workers producing clothes for Boohoo were paid £3.50 an hour, less than half the UK minimum wage for over-25s.
Bad Boohoo. What did it say to that?
It blamed it on others and promised to axe suppliers that fell short of its code of conduct. But some shareholders were unimpressed, not least because the share price plummeted by 46%. One said the online retailer’s response to the allegations was “inadequate in scope, timeliness and gravity”. In December an investigation by The Guardian claimed to have traced Boohoo’s supply chain to factories in Pakistan where workers claimed they were paid £47 a month and ordered to work shifts as long as 24 hours without receiving full overtime pay. Boohoo said it would investigate and would not tolerate mistreatment of workers. Yet there are allegations that exploitation in Leicester has continued. Last week Sky News revealed a claim from one worker that staff are asked to hand back cash to factory bosses after officially being paid the legal minimum wage. There is no suggestion Boohoo knows about the practice.
Can the Kamanis afford the high life?
Mahmud was raised by his father to be a stickler for cost control and once boasted of “still knowing where to buy the cheapest petrol in Manchester”. His sons are splashier: Umar, 33, hangs out with J.Lo and apparently hosted her 50th birthday bash at the singer Gloria Estefan’s house. He has more than a million followers on Instagram, where he posts pictures of himself in playboy mode, posing with the rapper Drake, sunbathing in the Maldives and playing tennis with Boris Becker. He says he FaceTimes will.i.am nearly every day.
How have they made so much money in retail while everyone else is going broke?
They understood the power of the internet earlier than most and are super-agile when it comes to trends. Boohoo is the master of next-day deliveries. Revenue in the year to February hit £1.74bn – despite all that bad press, the company saw an upturn in sales during lockdown as it pivoted from party fashion to loungewear. The brand has embraced body positivity and featured models with stretch marks and even colostomy bags. And the grandsons have weaponised social media. PrettyLittleThing has more than 15 million followers on Instagram and last February set up a “shop” in West Hollywood, inviting influencers to try on clothes and pose on a pink staircase, sipping champagne. Those “photo moments”, posted on hundreds of feeds, translated into untold amounts of free advertising – win-win.
I feel a “but” coming on…
Its clients might not care, but the environmental cost of fast fashion is steep. Boohoo was shamed by a February piece in The Atlantic entitled “How ultra-fast fashion is eating the world”, which said: “Producing clothing at this scale and speed requires expending enormous amounts of natural resources.” In 2019 a parliamentary committee published a report on fast fashion and sustainability, making recommendations such as a 1p garment tax that would be used to improve textile recycling. The government rejected them all.