Boohoo share price plummets amid modern slavery claims

Online fashion retail group Boohoo’s share value fell almost 11% this morning (6 July) as it found itself at the centre of allegations around poor treatment of factory workers in the UK.

The Boohoo, Pretty Little Thing and Nasty Gal parent company, which has also recently acquired Coast, Karen Millen, Oasis, and Warehouse, issued a statement saying it was “determined to drive up standards” where required. The comment followed reports in the Sunday Times that workers within its supply chain were being paid around £3.50-£4 per hour – less than half the required National Living Wage for people over the age of 25.

An undercover journalist for the newspaper reported a Leicester warehouse operating under the name, Jaswal Fashions, was paying the low rate to workers making Nasty Gal garments, as well as providing unsuitable working conditions.

Boohoo said it would “not hesitate to immediately terminate relationships with any supplier who is found not to be acting within both the letter and spirit of our supplier code of conduct”.

However, it added that Jaswal Fashions is not a declared Boohoo supplier.

“We are grateful to The Sunday Times for highlighting the conditions at Jaswal Fashions, which, if as observed and reported by the undercover reporter, are totally unacceptable and fall woefully short of any standards acceptable in any workplace,” it said.

“Our early investigations have revealed that Jaswal Fashions is not a declared supplier and is also no longer trading as a garment manufacturer. It therefore appears that a different company is using Jaswal's former premises and we are currently trying to establish the identity of this company.”

It added: “We are taking immediate action to thoroughly investigate how our garments were in their hands, will ensure that our suppliers immediately cease working with this company, and we will urgently review our relationship with any suppliers who have sub-contracted work to the manufacturer in question.”

The retail group said it has committed to working with local officials to raise its standards.

The Sunday Times also suggested social distancing protocol was not followed at the Leicester site.

Leicester is the first city or town in the UK to be subject to localalised lockdown measures due to particularly high instances of the coronavirus Covid-19. Non-essential shops and businesses have been closed in the city and residents have been advised by the government to stay at home as much as possible, in an attempt to halt the spread of the virus.