boohoo says conditions at the Leicester factory of one of its suppliers are “totally unacceptable” and vowed to take action following a damning Sunday Times investigation.
Shares in the listed fast fashion retailer dropped more than nine per cent on Monday morning after the experiences of an undercover reporter were published at the weekend.
The reporter worked for two days at a factory displaying the sign Jaswal Fashions and was told to expect a wage of £3.50 an hour, despite the minimum wage for those aged 25 and over being £8.72.
Video footage showed him packing garments destined to be sold under the Nasty Gal label, owned by Manchester-headquartered boohoo.
The factory foreman warned: “These mother****ers know how to exploit people like us. They make profits like hell and pay us in peanuts.”
Another member of staff warned him to keep his job secret, adding: “You are working illegally, so do not discuss or talk anything with people about working here.”
The factory was also working last week despite a full localised COVID-19 lockdown, without additional hygiene or social distancing measures in place.
Garment factories in Leicester are thought to be a leading cause of a recent spike in infections in the area. An estimated three-quarters of clothing made in Leicester are ultimately sold under boohoo brands.
boohoo released a statement to the London Stock Exchange on Monday morning.
“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 read.
“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.
“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.”
It continued: “boohoo remains committed to supporting UK manufacturing and is determined to drive up standards where this is required.
“Where help and support for improvement is required, we have and will continue to provide it, to ensure that everyone working to produce clothing in our supply chain is properly remunerated, fairly treated and safe at work.
“We will 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. This includes very clear expectations on transparency about second tier suppliers.”
Last month boohoo group reported a 45% increase in group revenue to £367.8m for the three months to May 31st and also acquired the intellectual property of women’s fashion retailers Oasis and Warehouse, both of which went into administration in April.
Meanwhile investors have revolted against a planned remuneration package for its leadership team which would see them paid £150 million if its valuation hits £6 billion.
It currently stands at £4.9 billion.