Fast-fashion retailer Boohoo said on Monday that it will investigate alleged illegal practices at a supplier in Leicester following reports that workers were being paid well below the minimum wage.
After sending an undercover reporter into a Leicester factory, The Sunday Times stated that workers handling clothes bearing Boohoo'sNasty Gal label could expect to be paid well below minimum wage.
Allegedly making clothes for Nasty Gal, the factory was also operating at full capacity despite Leicester going into a localised lockdown last week, as the government aims to contain and slow the spread of COVID-19 in the region.
"If as observed and reported by the undercover reporter", working conditions at Jaswal Fashions "are totally unacceptable and fall woefully short of any standards acceptable in any workplace", it said.
Shore Capital is unsure whether the headlines will stick with Boohoo's shopper base but said it will "watch developments with interest".
However, Boohoo claims Jaswal Fashions was not one of its suppliers and it appeared a different firm is using Jaswal's former premises.
"It therefore appears that a different company is using Jaswal's former premises and we are now trying to establish the identity of this company".
And, in a statement supplied to the BBC, Boohoo now states it's "taking immediate action to thoroughly investigate how our garments were in their hands", and "will urgently review our relationship with any suppliers who have sub-contracted work to the manufacturer in question".
Online fashion giant Boohoo says it will investigate its supply chain after an undercover investigation claimed some United Kingdom garment workers were being paid just £3.50 (AU$6.27 an hour) to make Nasty Gal garments through the coronavirus pandemic.
The news comes after home secretary Pritti Patel directed the National Crime Agency to investigate the ongoing concerns surrounding modern slavery in Leicester. It said the plan would ensure the leadership team is "motivated to deliver long-term sustainable growth for its shareholders, as the group targets a continuation of the exceptional levels of performance that it has delivered since IPO". "Next concluded there is a case for Boohoo Group to answer", he said.
The company said it has set up its own investigation over the claims.
The broker also highlighted the fact that 'many younger shoppers do have a particular interest in business ethics, labour practices and sustainability.
The claims have revived long-held concerns over working conditions in Leicester's garment industry, where around 1,000 factories and small workshops make clothes, mostly for United Kingdom fast-fashion brands.
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