Boohoo hires QC to re­view sup­ply chain as shares slide

The Daily Telegraph - Business - - Business - By Laura Onita

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”.

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