Low-cost fashion retailer Boohoo has ordered an independent review into its UK supply chain following reports of poor pay and working conditions at a Leicester factory.
Earlier this week the company said it would investigate conditions with suppliers after the Sunday Times reported that workers at Jaswal Fashions, a garment factory in Leicester, were being paid £3.50 an hour, and that working conditions were unsafe, with few measures in place to stop the spread of coronavirus.
The brand’s products have since been dropped by Next and Asos amid the claims that workers have been underpaid and put at risk. Shares in the company have also dropped by half.
Leicester is currently under a localised lockdown after a spike of Covid-19 cases in the city.
Boohoo has claimed that Jaswal is not one of its declared suppliers and believes a different company is using the premises. The retailer said “we are currently trying to establish the identity of this company”.
In a statement to investors, it said: “We are taking immediate action to thoroughly investigate how our garments were in their hands, will ensure that our suppliers immediately cease working with this company, and we will urgently review our relationship with any suppliers who have subcontracted work to the manufacturer in question.”
The Sunday Times revealed details of the conditions at the factory after an undercover reporter got a job there, and was told to expect pay between £3.50 and £4 an hour, despite the national minimum wage for someone over 25 being £8.72 an hour.
The reporter said that few workers were wearing masks or practising social distancing, despite the localised lockdown.
Workers’ rights group Labour Behind the Label has already claimed that some employees in Leicester factories have been forced to come into work despite being sick with Covid-19. Boohoo responded at the time that it would not tolerate any non-compliance with pandemic working rules.
Last week home secretary Priti Patel asked the National Crime Agency to investigate modern slavery in Leicester clothing factories after a number of reports from whistleblowers.
The company said it had brought in a third-party advisory company to ensure its working practices met the required standards.
The statement added: “Our support for UK manufacturing is not driven by price; in fact, overseas pricing is much more competitive. Our international distribution centre is located in the UK and having a local supply base enables shorter lead times and supports our agile business model. In 2019, we retained the services of a third party compliance specialist to strengthen our compliance and auditing programme.
“Boohoo are keen and willing to work with local officials to raise standards because, we are absolutely committed to eradicating any instance of non-compliance and to ensuring that the actions of a few do not continue to undermine the excellent work of many of our suppliers in the area, who work tirelessly to provide good jobs and good working conditions.”
Announcing the investigation, it said it would spend an initial £10m “to eradicate supply chain malpractice”, and was accelerating an independent third party supply chain review with ethical audit and compliance specialists, Verisio and Bureau Veritas.
The initial findings will be reported in September.
This article was updated on 8 July.