Boohoo Group PLC (AIM:BOO) shares dropped on Wednesday after an undercover investigation uncovered poor conditions were continuing for workers at the fast-fashion group despite its efforts to improve its ethics.
Staff at the Burnley, Lancashire warehouse run by the AIM-listed company - which made profits of £883mln in the first half of this year - have to walk more than 10 miles per shift in temperatures which can top 30°C, with badly fitting safety equipment, according to an investigation by the Times newspaper.
Following injuries and staff collapsing during the effort, the report claimed ambulances are regularly called to the site.
Workers, who are monitored and directed via a device they wear on their arm, are expected to gather 130 clothing items per hour from the windowless distribution warehouse, an undercover journalist found.
The report cited complaints of racism and sexual harassment, with lavatory breaks timed and temperatures at night consistently above 30C, with a maximum of 32C.
Boohoo, which owns the Nasty Gal, Pretty Little Thing, Karen Millen, Oasis and Dorothy Perkins brands, was rocked by a modern slavery scandal in 2020 after it was connected to garment factories in Leicester where workers faced extremely poor pay and conditions, which was highlighted as the city was hit by local coronavirus lockdowns.
The company conducted a review led by Alison Levitt QC and appointed another noted lawyer Sir Brian Leveson to oversee efforts to improve supply chain requirements, resulting in the development of its ‘Agenda for Change’, where 15% of the annual bonus paid to executives will be tied to the delivery of this ESG transformation strategy.
After closing at 38.81p overnight, Boohoo shares dropped to 35p early on Wednesday before easing to 37.63p after an hour's trading, a fall of just over 3%.
A boohoo group spokesperson said: “boohoo is taking every claim very seriously, but does not believe the picture painted is reflective of the working environment at our Burnley warehouse. Over recent years, we have invited and subsequently received representatives from external organisations, authorities and people such as the GLAA, local MPs, the deputy leader of the local council, and Burnley College, and we remain committed to transparency and engagement.
“Making sure our people are safe and comfortable in their workplace is our highest priority."
The company said its employee turnover rate has fallen year on year, that it offers rates of pay above the National Living Wage and that its employee engagement programme suggests staff "are happy with their working environment, feel valued and feel listened to".
Having operated the Burnley warehouse for 12 years, the company is "extremely proud of the work that we do there, the amazing team we have on-site and the important part our business plays in giving back to the local community".
** Update: adds spokesperson response **