Wednesday 8 July 2020 9:16 am

Boohoo launches independent review of supply chain after Leicester factory claims

Fast fashion retailer Boohoo suffered a further share price drop this morning after it launched an independent review of its UK supply chain following allegations of poor working practices and underpayment of workers at a clothing factory in Leicester. 

Boohoo this morning said it was “shocked and appalled” over the allegations that the Jaswal Fashions factory in Leicester paid workers as little as £3.50 per hour.

The company’s share price fell more than 11 per cent this morning after closing 11 per cent down yesterday as investors reacted to the claims of worker exploitation.

Read more: Boohoo shares continue to fall after Leicester factory worker exploitation claims

Following an internal investigation the company confirmed this morning that it had found evidence of non-compliance with its code of conduct, and has terminated its relationship with two suppliers. 

However, the e-commerce firm said it had not found evidence that workers were paid £3.50 per hour. 

Group chief executive John Lyttle said: “As a board we are deeply shocked by the recent allegations about the Leicester garment industry. We wish to reiterate how seriously we are taking these matters and we will not hesitate to terminate any relationships where non-compliance with our Code of Conduct is found.”

The independent review will be led by Alison Levitt QC and will focus on supplier compliance with minimum wage and coronavirus regulations, working hours and record keeping, and right to work documentation and contracts of employment. 

Boohoo will update on the status of the review in September and January before publishing a full sustainability report in spring next year. 

While Boohoo admitted to some non-compliance with its code of conduct, it also denied some of the detail of the claims, which were first published in the Sunday Times. 

Read more: Boohoo shares dive following Leicester factory allegations

Boohoo said the garments were not made in the Leicester factory but were manufactured in Morocco before being shipped to Leicester to be repackaged for delivery to Boohoo’s Burnley distribution centre.

Boohoo also claimed that Jaswal Fashions never been a supplier to the group, and the order, which was for its Nasty Gal brand, was placed with Revolution Clothing which contracted Morefray Limited to manufacture in Morocco. The Leicester factory is no longer used by Jaswal Fashions, it said.