Boohoo Group PLC (AIM:BOO) has been using "Made in the UK" labels on potentially thousands of garments that were actually manufactured in South Asia, according to BBC Panorama research.
The investigation found that during last year plain T-shirts and hoodies had their original labels removed at Boohoo's flagship factory at Thurmaston Lane in Leicester.
Garments had been shipped from Pakistan and other South Asian countries to the factory, where they then underwent printing.
Dr Ryan Cushley-Spendiff, a lecturer at Nottingham Law School, said: "This is particularly unfortunate for Boohoo, as “country of origin” labels are not generally legally required on clothing within UK law in the first place.
“However, the status changes where the “country of origin” is misleading, potentially violating the Consumer Rights Act 2015. Moreso, deceiving the consumer on the geographical origin is an explicitly banned practice under consumer protection trading regulations.”
It comes just days after reports revealed that the company is considering closing the site despite it having been opened to become a ‘model factory’ which would provide end-to-end garment production for Britain.
Boohoo explained that the mislabelling was due to a misinterpretation of the rules.
The incidents occurred between January and October 2023 and affected up to one in 250 of Boohoo's global supply of garments.
This has led reports to estimate that hundreds of thousands of clothes were affected.
Boohoo, which claims this is an isolated incident due to “human error”, asserts it “has taken steps to ensure this does not happen again.”
Cushley-Spendiff concluded: “While unlikely to go as far as prosecution, it being human error is no ‘get out of jail free’ card in terms of consumer redress. If Boohoo wishes to mitigate the inevitable fallout, a product recall should be drafted as soon as possible.”
Boohoo shares dropped more than 2% on Thursday at around 34p.