Sweatshop scandal hits Boohoo rival: Quiz launches probe into claims supplier paid staff £3 an hour
As larger rival Boohoo continued to reel from the sweatshop scandal, Quiz’s shares fell more than 20 per cent in early trading
Quiz shares swung wildly as the fashion brand launched an investigation into claims one of its suppliers paid staff as little as £3 an hour. As larger rival Boohoo continued to reel from the sweatshop scandal, Quiz’s shares fell more than 20 per cent in early trading as it was also hit by allegations about underpaid workers.
But the bombed out stock, which is worth just a fraction of the 200p it was changing hands for two years ago, clawed back losses later in the day to close up 0.3 per cent, or 0.02p, at 6.77p. The roller-coaster at Quiz came as Boohoo shares tumbled another 17.7 per cent, or 49.5p, to 230p a week after it was rocked by claims that workers in a Leicester clothing factory were paid as little as £3.50 an hour.
The national minimum wage for those over 25 is £8.72 an hour. There were also claims that there were few measures in place to protect workers from coronavirus. Leicester is in a localised lockdown following a spike in Covid-19 cases.
Home Secretary Priti Patel yesterday said there is a ‘modern-day scourge’ taking place in the textile sector with regards to the exploitation of workers.
At the same time local MP Andrew Bridgen said there could be as many as 10,000 people working in slave-like conditions in textile factories in Leicester.
As Quiz was dragged into the scandal, the firm said it believes one of its suppliers based in the city has used a sub-contractor accused of paying staff just £3 an hour.
Quiz chief executive Tarak Ramzan said: ‘We are extremely concerned and disappointed to be informed of the alleged breach of national living wage requirements in a factory making Quiz products.
‘The alleged breaches to both the law, and Quiz’s ethical code of practice, are totally unacceptable.
‘We are thoroughly investigating this incident.’
Quiz claimed the supplier had sub-contracted production to another firm in direct contravention of previous instructions, adding it was going to tighten up its audit processes in Leicester.
Boohoo shares have fallen nearly 40 per cent since Monday last week, wiping close to £2billion off its market value.
The rout has also hit the fortunes of the founders, with Mahmud Kamani and his family losing more than £350million and Carol Kane around £47million.
Retailers including Next, Asos and Zalando have also dropped Boohoo products following the allegations.
The National Crime Agency and the Health and Safety Executive are already investigating the industry
Greg Lawless, of investment group Shore Capital, reiterated its sell rating citing Aberdeen Standard Life’s decision to sell the majority of its stake in Boohoo and describing its board’s subsequent actions as ‘inadequate’.