The latest Investing Matters Podcast episode featuring Jeremy Skillington, CEO of Poolbeg Pharma has just been released. Listen here.
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MJChase - Please read my post below. You have no idea how contracts and subcontracts work. You need to do some proper research and stop guessing.
I don't just believe that any investor worth his salt will consider all aspects , there is the financial implications , since boohoo may have been purchasing these products from its suppliers at an abnormally lower cost it will indeed no doubt hit profit margins or they will be forced to increase prices either way the fast fashion ethos will die, depending on the outcome of the investigation there is also the possibility of a fine , if they have been found to of broken the law.
MJChase - you need to do some proper research on Boohoo.
Boohoo contract their work to suppliers who must pay the minimum wage and take care of their employees safety. This is part of the contract and the strict code of conduct in the contract.
Suppliers can subcontract their Boohoo work out to subcontractors however they must legally give Boohoo the names and details of all subcontractors. They must ensure that all subcontractors pay the minimum wage, keep their employees safe and adhere to Boohoo's strict code of conduct.
This was one supplier who subcontracted their Boohoo work to one rogue supplier factory. Boohoo was not provided with the details of this one rogue subcontracted supplier factory. The supplier who subcontracted the work has behaved illegally. Boohoo will have terminated this one supplier's contract and will no doubt have learnt lessons form this that they will be sure to put into practice for the future.
Next and ASOS contract their work to suppliers outside the UK. Do you think they police their factories or who they subcontract the work to?
This point already made. No one will be rushing to buy boohoo products purely because of an association with modern slavery. You can believe that but it’s wrong. SP may well recover but not for that reason.
Even without the likes of those that you mention Boohoo seem to be doing a great job themselves of damaging their own reputation. Its hard to fathom that a company of this scale doesn't ask its suppliers if they comply with the modern slavery act which in turn would also trigger questions to so called sub-suppliers.
I remember being told many years ago that all exposure is good even if it's bad exposure because it gets you noticed.
Everyone will know about Boohoo now and will be going to their website to check them out. They may even make more money out of this exposure.
This demonisation of Boohoo makes me wonder if Shadowfall, Simon Cawkwell aka evil knievil, are in cahoots with the likes of Labour Behind the Label, Daily Mail and Sunday Times to demonise Boohoo to get the share price down.
Shadowfall have a big short on Boohoo, brought out their sensationalist and scaremongering report not so long ago, making all sorts of accusations about Boohoo which proved untrue. Then Simon Cawkwell aka evil knievil jumped on the bandwagon saying he'd taken a short out on boohoo. Then the Labour behind the label report which was more pure sensationalism came out last week. Daily Mail jumped onto this. Then the Sunday Times has found one rogue subcontracted supplier. One rogue subcontracted supplier. Something smells very dirty about all this to me and needs to be investigated for any criminal fraud by Shadowfall and Simon Cawkwell aka evil knievil in case they're in cahoots with the media to purposely find something against Boohoo to get the share price down. Something's not right here.
Next and ASOS jump on the bandwagon to make money out of Boohoo when their suppliers are from China, India, Bangladesh, Turkey and you can be sure they don't oversee these factories on a daily basis.
Boohoo have a team of 20 permanently based in Leicester policing factories. Boohoo made one mistake using a supplier who subcontracted to one rogue supplier factory. Boohoo contract 40% of their work in the UK. Next and ASOS don't do that because they make more profit contracting their work outside the UK. Boohoo should be congratulated for contracting 40% of their work in the UK and not demonised for one rogue subcontracted supplier factory.