MANCHESTER, United Kingdom — British online fashion retailer Boohoo will end relationships with any supplier found to have breached its code of conduct, it said on Monday following a media report about poor working conditions in one factory in England.
Boohoo shares slumped more than 12 percent after The Sunday Times newspaper said workers in a factory in Leicester, central England, making clothes destined for Boohoo were being paid as little as £3.50 ($4.38) an hour.
It said the factory, which displayed the sign Jaswal Fashions, was also operating last week during a local coronavirus lockdown in Leicester, without additional hygiene or social distancing measures in place.
Boohoo is by far the biggest company on London's AIM market with a capitalisation of nearly £5 billion.
"We are grateful to The Sunday Times for highlighting the conditions at Jaswal Fashions, which, if as observed and reported by the undercover reporter, are totally unacceptable and fall woefully short of any standards acceptable in any workplace," Boohoo said.
It said its early investigations had revealed that Jaswal Fashions was not a declared supplier and was also no longer trading as a garment manufacturer, indicating that a different company was using Jaswal's former premises.
Boohoo said it was trying to establish the identity of this company.
"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."
Last week, Boohoo defended its business practices after a garment workers' rights group said it was putting workers at factories in Leicester supplying the group at risk of coronavirus infection.
On Sunday, Britain's health minister Matt Hancock said he was worried about factory conditions in the city.
By James Davey; editors: Michael Holden and David Clarke