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boohoo launches supply chain probe as clothing giants drop its brands

The news came just hours after three leading clothing retailers – Next, Zalando and ASOS - dropped boohoo from their roster of clothes stockists

Boohoo Group PLC -
The Sunday Times made allegations of low pay and poor conditions at a supplier's factory in Leicester

boohoo Group PLC (LON:BOO) said it has started an independent investigation into its supply chain following the weekend allegations of low pay and poor conditions at a supplier's factory in Leicester.

“As a board, we are shocked and appalled by the recent allegations that have been made and we are committed to doing everything in our power to rebuild the reputation of the textile manufacturing industry in Leicester,” the Nasty Gal and PrettyLittleThing group said in a statement.

The news came just hours after three leading clothing retailers - Next, Zalando and ASOS - dropped boohoo from their roster of clothes stockists.

Alison Levitt QC will lead the inquiry, which is being accompanied by a £10mln investment that the company said is to eradicate 'supply chain malpractice'.

AIM-listed boohoo, which has seen £1.6bn wiped from its market value since Monday, said: “We take extremely seriously all allegations of malpractice, poor working conditions, and underpayment of workers."

“The group will not tolerate any incidence of non-compliance with its Code of Conduct or any mistreatment of workers, and will not hesitate to terminate relationships with any supplier who does not comply,” it added in the statement.

An undercover reporter from the Sunday Times had alleged a Leicester-based factory, Jaswal Fashions, was paying staff as little as £3.50 per hour and operating with poor hygiene even after the new outbreak of coronavirus (COVID-19) in the city.

Today, boohoo said that Jaswal Fashions had never been a supplier and the order at the factory featured in the Sunday Times report was being repackaged for delivery to the group’s international distribution centre in Burnley.

The relationship with the two companies responsible for the order had been terminated, boohoo said.

Alison Levitt’s investigation will prioritise supplier compliance with minimum wage regulations; compliance with COVID-19 regulations; working hours and record-keeping and right to work documentation and contracts of employment, it added.

Quick facts: Boohoo Group PLC

Price: 336.9 GBX

Market: AIM
Market Cap: £4.25 billion

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