Boohoo Group PLC (AIM:BOO) is in a stand-off with some of its suppliers after withholding payments over claims of poor-quality clothing, according to a report by The Telegraph.
The fast-fashion retailer is reportedly targeting manufacturers it alleges are responsible for producing a high proportion of faulty goods.
Boohoo is reportedly refusing to pay these suppliers until the issues are resolved.
A source close to Boohoo described the move as 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 company said it is "contractually entitled" to withhold payments due to "very high levels of faulty goods”.
It comes as Boohoo continues to grapple with a burdensome debt pile.
In July, Boohoo was revealed to be working with FTI Consulting to refinance its debt, sparking concerns among analysts.
Boohoo’s debt problems and 17% year-on-year decline in revenues have weighed on the group’s share price.
Year to date, the stock is down more than 24% to 28.34p.