£1billion crisis for Boohoo as police probe ‘sweatshops’
FASHION giant Boohoo was facing a major crisis yesterday after it was alleged workers were toiling away for just £3.50 an hour in a “sweatshop”.
Shares plunged by £1.1billion after Home Secretary Priti Patel asked for an investigation into factory conditions.
The National Crime Agency confirmed it is probing Leicester’s textile industry over allegations of modern slavery and exploitation.
Boohoo said it was investigating reports and pledged to end relationships with any supplier found to have broken its code of conduct. It comes after reports that a factory making clothes for the online fashion retailer was paying staff illegally low wages and flouting safety measures.
The reports said the factory, said to have displayed Jaswal Fashions signs, was operating last week in the local coronavirus lockdown in Leicester.
Undercover
Leicester was the first city to face a local lockdown after a rise in coronavirus cases.
The rise has been linked to the city’s garment factories.
Staff at the plant claimed they were being exploited and paid £3.50 an hour – not even half the minimum wage for people aged 25 or over.
In covert footage, an undercover reporter recorded himself packing garments clearly labelled for Boohoo’s Nasty Gal brand.
The Home Secretary branded the conditions “truly appalling”. She said: “I will not tolerate sick criminals forcing innocent people into slave labour and a life of exploitation.”
The National Crime Agency said: “Officers attended a number of business premises in Leicester to assess concerns of modern slavery and human trafficking.”
Boohoo said Jaswal Fashions was not one of its declared suppliers and was no longer trading as a garment manufacturer.
A spokesman said: “It therefore appears that a different company is using Jaswal’s former premises and we are currently trying to establish the identity of this company.
“We are taking immediate action to thoroughly investigate how our garments were in their hands, and we will ensure that our suppliers immediately cease working with this company.
“We will urgently review our relationship with any suppliers who have sub-contracted work to the manufacturer in question.
“Boohoo wants to reiterate it does not condone any mistreatment of employees and of non-compliance with our strict supplier code of conduct.
“Boohoo remains committed to supporting UK manufacturing.”
Sales at Boohoo, which trades exclusively online, had surged during the coronavirus lockdown.
The company recently bought the online businesses of Oasis and Warehouse and earlier this year acquired MissPap, Karen Millen and Coast.
Co-founders Mahmud Kamani and Carol Kane both netted more than £1.3million for the last financial year.
They could share in a bonus of up to £150million if a number of performance goals are met by 2023.