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Boohoo plunges on 'unacceptable' worker revelations

The fast fashion online retailer rejected the findings of a campaigning group's report last month
July 6, 2020

Boohoo (BOO)has launched a review of its UK supply chain following allegations in The Sunday Times surrounding working practices in a factory that has handled the group’s garments. The article follows a report by activist group Labour Behind the Label published last month, which accused Boohoo of sourcing clothing from Leicester suppliers that have put workers at risk during the coronavirus pandemic. ASOS (ASC) and Zalando (Ger:ZAL) are among retailers to have dropped Boohoo over the claims.

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Boohoo described the conditions at the Jaswal Fashions facility highlighted by The Sunday Times, which included payment below the minimum wage, as “totally unacceptable”. The fast fashion online retailer said that Jaswal Fashions is not a declared supplier and is also no longer trading as a manufacturer. 

“We are taking immediate action to thoroughly investigate how our garments were in their hands,” the company said. Boohoo committed to ensuring that its suppliers stop working with this company. “We will urgently review our relationship with any suppliers who have subcontracted work to the manufacturer in question,” it added.

The company has rejected accusations of responsibility for Leicester’s recent surge in coronavirus infections, which has kept the city in lockdown while the rest of England begins to relax restrictions. Labour Behind the Label alleged that factories operating for Boohoo “continue to operate at full capacity, with little or no social distancing and provision of PPE or sanitizing stations”. The group also claimed to have received reports of furlough fraud. 

Boohoo disputed the accuracy of the report and said that it had made PPE available to suppliers free of charge. The retailer began a review earlier this year into its UK suppliers that included an audit of their manufacturing facilities.

Boohoo’s facilities have also been subject to external investor scrutiny. The company is a core holding in Aberdeen Standard Investments’ UK Responsible Equity Fund and its UK Ethical Equity Fund. In March, the asset manager said that it had been invited to visit Boohoo’s Leicester factories following negative media coverage. 

“We are speaking to Boohoo management in light of these recent allegations to understand what action they are taking in response,” an Aberdeen Standard Investments spokesperson said the day after the Times report emerged.