Boohoo hires QC to review supply chain as shares slide
BOOHOO has drafted in independent specialists and launched a sweeping investigation of its supply chain in the wake of sweatshop allegations.
Its move came as Britain’s National Crime Agency said yesterday it was investigating allegations of modern slavery and labour exploitation in Leicester’s textile industry, alongside the police and other authorities.
Following a three-day investigation, Boohoo has said that garments for its brand Nasty Gal were made in Morocco and not Leicester, but were shipped there for repackaging. It added that it had found no evidence of suppliers paying workers £3.50 an hour, as reported in The Sunday Times.
However, Boohoo said it found “other evidence of non-compliance” for two suppliers that did not adhere to its standards and had severed ties with them. Despite the measures, the company’s shares continued to drop, falling another 14pc to close at 224.5p.
The stock has lost 42pc of its value since Friday, leaving Boohoo worth £2.8bn – £270m less than rival Asos.
Boohoo has said it is “shocked and appalled” by the claims. It clarified that Jaswal Fashions, where the investigation took place, had never been a supplier and it did not occupy the site, despite the factory displaying the sign.
The independent investigation into its supply chain will be led by Alison Levitt QC, the head of the business crime group at law firm Mishcon de Reya, and Brian Small, the company’s deputy chairman.
It is also working with two compliance firms, Verisio and Bureau Veritas, to scrutinise its third-party suppliers. It has vowed to inject £10m to “eradicate supply chain malpractice”.