Boohoo Share News (BOO)

(Sharecast News) - Online fashion giant Boohoo issued a response to the latest allegations of substandard working conditions in its factories on Friday, after Sky News claimed that workers in Leicester were still being exploited.
The news came a year after it was widely reported that some workers in textile factories in the East Midlands city were being paid from just £3.50 per hour.

Following that, an investigation was launched by the government and local council, which has inspected hundreds of factories.

Boohoo, a major buyer from Leicester suppliers, stopped buying from a number of Midlands manufacturers after conducting its own investigation, but still maintained relationships with 50 Leicester factories after it published a new list of approved textile makers in May.

According to Sky News, the payslips of an employee at one of those factories show a correct number of hours worked, and that she was paid the minimum wage of £8.91 per hour.

But a handwritten slip of paper reportedly given with each payslip shows an amount of cash the worker must withdraw in cash, and return to factory bosses.

The employee and her husband told Sky News that the practice began after Boohoo's investigation, and its insistence that staff were paid the correct, legal minimum wage.

There was no suggestion that Boohoo was aware of the practice, however.

In a statement released to the market on Friday, the company said that since its review last year, it had visited suppliers in Leicester more frequently, removed sub-contracting, installed mandatory whistleblower helplines at each supplier, and used "technology" to "forensically monitor" suppliers and their financial records.

It said that over the next 12 months, it would transition all of its suppliers to the 'Fast Forward' forensic auditing model.

Boohoo said it was continuing to work "closely" with authorities including the Gangmaster and Labour Abuse Authority, as well as anti-slavery charity Hope for Justice, which is involved in the affected Leicester communities and was involved in the Sky News investigation.

"As a group, we are wholly confident that the significant steps that we have taken over the last 12 months are resulting in a fair, robust and transparent supply chain," said chief executive officer John Lyttle.

"The group continues to closely monitor its suppliers, with swift action taken against any suppliers who fail to demonstrate the high standards that we expect.

"Nobody has done more to drive change in Leicester than ourselves, and our work continues unabated."

At 1221 BST, shares in Boohoo Group were down 4.3% at 257.25p.