Online fashion retailer Boohoo has pledged to investigate how its clothes came to be made by a Leicester garment factory where workers were paid just £3.50 an hour in conditions that allegedly put them at greater risk of catching Covid-19.
Shares in the company slumped by 9% in early trading on Monday morning, the first day since revelations about its supply chain came to light.
Boohoo, which owns brands such as Pretty Little Thing and Nasty Gal, said conditions at the Jaswal Fashions factory in Leicester were “totally unacceptable and fall woefully short of any standards acceptable in any workplace”.
Boohoo booms as Leicester garment factories are linked to lockdown
Sales of clothes made by suppliers in Leicester have helped fuel rapid growth that could put its bosses in line for bonuses worth £150m as part of a three-year bonus scheme.
But Boohoo, which has enjoyed surging sales during the pandemic, as locked down shoppers browsed for clothes online, said it was not sure who was supplying them.
“Our early investigations have revealed that Jaswal Fashions is not a declared supplier and is also no longer trading as a garment manufacturer,” it said in a statement to investors in the company, which floated on the stock market in 2014.
“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.
“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 subcontracted work to the manufacturer in question.”
It comes after an undercover reporter for the Sunday Times found staff being paid as little as £3.50 an hour in the factory, even though the minimum wage in Britain for those aged 25 and over is £8.72.
Priti Patel, the home secretary, asked the National Crime Agency to investigate modern slavery in Leicester’s clothing factories last week, after whistleblowers raised the alarm about conditions in the city’s industry.
Leicester has been the site of a localised coronavirus outbreak, with cramped conditions and lax safety measures in garment factories thought to have played a role in transmission of the virus.
Boohoo had previously said that none of its suppliers had been affected.
On Monday, the company said: “We are keen and willing to work with local officials to raise standards because we are absolutely committed to eradicating any instance of non-compliance and to ensuring that the actions of a few do not continue to undermine the excellent work of many of our suppliers in the area, who provide good jobs and good working conditions.”
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