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Boohoo and its suppliers are reportedly in a dispute over claims the fast fashion group has received a significant amount of defective stock and is therefore withholding payments, The Telegraph has reported.
It is understood that the fashion group is refusing to pay the outstanding fees until the issues are resolved.
A source close to Boohoo told The Telegraph that this is part of a three-month programme of work to “improve quality following a marked increase in faulty goods being delivered by a small group of suppliers”.
The same source also maintained that the retailer received “very high levels of faulty goods”, and that it was “contractually entitled” to withhold money.
A Boohoo spokesman told Retail Sector: “Boohoo Group is committed to delivering products of the highest quality to its customers.
“We are currently talking with a very small number of supplier partners where, unfortunately, the product supplied was not of a high enough standard. We are working collaboratively with them to remedy the situation and ensure this does not happen again.”
Boohoo has experienced a slowdown in sales in recent times, and back in May, reported losses of nearly £160m due to high levels of inflation and weakened consumer demand.
Sales were also down 17% to £1.46bn in the year to 29 February, which it said reflected its increased focus on profitability alongside the challenging market conditions.
The retailer is also gearing up for critical debt negotiations in the coming months as it seeks to persuade lenders to refinance over £300m in existing loans.
