Clothes retailer Boohoo shares slide again by 14% on factory pay probe
Shares in clothes retailer Boohoo -- which also owns the Pretty Little Things label -- continued to slide as it commissioned an independent review of its supply chain in Britain after a damaging media report about dire factory working conditions.
While factory conditions in Asia have long been in the spotlight, the exploitation of low-paid workers in Britain has also come to light in recent years, with a parliamentary committee examining the issue in 2019.
However, regular disclosures into British and overseas supply chain conditions have had little impact on the popularity of fast fashion amongst consumers.
Boohoo shares have lost about a third of their value since The Sunday Times reported that workers in a factory in Leicester who were making clothes destined for Boohoo were paid as little as £3.50 pounds (€3.88) an hour. It is still valued at £2.8bn after a meteoic rise in the past year.
The newspaper said the factory was also operating last week during a local coronavirus lockdown, without additional social distancing measures, while a workers’ rights group said that people at supplier factories were being put at risk of infection.
Boohoo, which sells own-brand clothing, shoes, and accessories targeted at 16 to 40-year-olds, said its investigation to date had not found evidence of suppliers paying workers £3.50 an hour.
However, it had found evidence of non-compliance with its code of conduct and ended its relationship with two suppliers.
Boohoo shares fell as Next and Zalando took its products off their websites.
The British parliament’s environmental audit committee called on the government in February 2019 to end the era of throwaway fashion, although all its recommendations covering labour market practices were rejected.
