Under fire fashion retailer Boohoo has launched an independent review of its supply chain after a scandal about working conditions at factories.
The investigation will be led by lawyer Alison Levitt QC and comes after the company’s shares plummeted £1billion amid the claims of poor pay and practices.
Boohoo said it was going to invest £10million to try and tackle the problem as well as speed up its independent third party supply chain review with ethical audit and compliance specialists.
Factory workers at Faiza Fashion in Leicester – where Boohoo and PLT clothing is allegedly made
A statement from the firm said: ‘We take extremely seriously all allegations of malpractice, poor working conditions, and underpayment of workers.
‘The group will not tolerate any incidence of non-compliance with its Code of Conduct or any mistreatment of workers, and will not hesitate to terminate relationships with any supplier who does not comply.’
It came after three major online retailers have dropped the brand over the claims of low pay and unsafe conditions at a supplier’s factories.
Next dropped Boohoo clothes from its websites last week, while Asos and Zalando followed suit on Tuesday.
The fallout came after a Sunday Times report claiming workers at a Leicester factory were paid £3.50 an hour, while being offered no protection from coronavirus.
Love Islands Steph Lamb and Ellie Brown at The Boo Hoo Man Tracksuit Party at Rosso Restaurant in Manchester last year
Jayde Pierce at the Boohoo spring collection at Dream Hollywood in March, 2018
An advert for Boohoo who have come under fire over allegations over poor treatment at factories
The Indian-born billionaire and his playboy son who began the Boohoo fast fashion brand from a Manchester market stall
Mahmud Kamani, pictured right, alongside his son, didn’t want to spoil his children, but helped them set up Pretty Little Thing
Mahmud Kamani, 55, started out running a Manchester market stall and launched Boohoo in 2006, now worth £2.6 billion, with his son Adam on board.
Mahmud’s other son Umar, 32, is CEO of clothes retailer PrettyLittleThing, which his father’s Boohoo Group bought a 34 per cent stake in for £269.8 million in May.
The billionaire clothes retailer’s own father Abdullah Kamani went to school in Gujurat, India. He moved the family to Kenya, where many Indian families had prospered in the British Empire.
Mahmud was born there in 1964, but four years later the Kamanis were forced to flee to Britain by increasing unrest and draconian employment laws that favoured native Kenyans.
They settled in Manchester, where the entrepreneurial Abdullah sold handbags on a market stall to feed his family, before investing in property and founding the wholesale textile business Pinstripe, where Mahmud worked, using family connections in India to source garments.
By the early 2000s, the firm was selling nearly £50 million of clothing a year to High Street names such as New Look, Primark and Philip Green’s Topshop.
Today it has a workforce of over 1,000, and celebrity advocates including everyone from Little Mix to Tallia Storm.
A second factory which supplies Boohoo was also uncovered, where workers claimed to be paid less than half the £8.72 minimum wage. One, aged 39, said he was paid just £4 an hour
Home Secretary Priti Patel called the allegations ‘truly appalling’ and vowed to clamp down on modern slavery.
The National Crime Agency is investigating the city’s garment industry and has visited premises to investigate ‘concerns of modern slavery and human trafficking’.
A spokesman for Next said the fashion giant stopped selling items from Boohoo brands last week after campaign group Labour Behind The Label first raised concerns.
The spokesman said: ‘Next concluded there is a case for Boohoo Group to answer.
‘Next needs to prove to itself the two Boohoo Group labels that it was stocking are being sourced in a manner that is appropriate and acceptable to Next.
‘Next therefore has its own investigation under way to ascertain whether they are being made in a way that Next does not approve of.’
Boohoo sells its products through a variety of third-party sites, although it is understood that wholesale revenues represent a small fraction of sales, with the company’s recent strategy focusing on acquiring new online brands and platforms.
The Manchester-based online retailer said on Monday that it will end relationships with any supplier it finds to have broken its code of conduct.
It is understood that Asos has temporarily suspended its trading relationship with Boohoo brands until the group has completed its investigations and is able to provide assurances over its supply chain.
Berlin-based Zalando said it delisted around 300 products made by Boohoo Group on Tuesday.
A spokeswoman for the company said: ‘During the coronavirus crisis, the health and safety of our employees has remained of utmost importance to Zalando.
‘We adjusted to this ‘new normal’ with strict preventative measures to keep all employees safe while staying open for business.
‘We expect our partners to apply similar fundamental priorities and will distance ourselves from those who don’t.’
After the scandal broke Boohoo moved quickly to say that they wanted to make sure all its suppliers followed a good standard.
A management statement said: ‘As a board, we are shocked and appalled by the recent allegations that have been made and we are committed to doing everything in our power to rebuild the reputation of the textile manufacturing industry in Leicester.
‘We want to ensure that the actions of a few do not continue to undermine the excellent work of many suppliers in the area, who succeed in providing good jobs and good working conditions.
‘We take extremely seriously all allegations of malpractice, poor working conditions, and underpayment of workers.
‘The group will not tolerate any incidence of non-compliance with its code of conduct or any mistreatment of workers, and will not hesitate to terminate relationships with any supplier who does not comply.’