(Alliance News) - Next PLC and ASOS PLC have dropped Boohoo Group PLC clothing from their websites after claims that the fast-fashion retailer sold clothes made in factories where staff were paid less than the minimum wage and worked in poor conditions.
Boohoo has had more than GBP1 billion wiped from its share value in the past two days after an article in The Sunday Times alleged that workers in a Leicester factory making clothes destined for Boohoo were being paid as little as GBP3.50 an hour.
The stock closed 12% lower at 261.40 pence each in London on Tuesday. Next shares closed down 1.6% at 4,775.00p each and ASOS ended down 5.0% at 3,196.00p.
Other online retailers, including Zalando and Very.co.uk, have also temporarily suspended the sale of Boohoo items.
A spokesman for Next said the fashion giant stopped selling items from Boohoo brands last week after campaign group Labour Behind The Label first raised concerns.
The spokesman said: "Next concluded there is a case for Boohoo Group to answer.
"Next needs to prove to itself the two Boohoo Group labels that it was stocking are being sourced in a manner that is appropriate and acceptable to Next.
"Next therefore has its own investigation under way to ascertain whether they are being made in a way that Next does not approve of."
Boohoo sells its products through a variety of third-party sites, although it is understood that wholesale revenues represent a small fraction of sales, with the company's recent strategy focusing on acquiring new online brands and platforms.
The Manchester-based online retailer said on Monday that it will end relationships with any supplier it finds to have broken its code of conduct.
It is understood that ASOS has temporarily suspended its trading relationship with Boohoo brands until the group has completed its investigations and is able to provide assurances over its supply chain.
Berlin-based Zalando said it delisted around 300 products made by Boohoo Group on Tuesday.
A spokeswoman for the company said: "During the coronavirus crisis, the health and safety of our employees has remained of utmost importance to Zalando.
"We adjusted to this "new normal" with strict preventative measures to keep all employees safe while staying open for business.
"We expect our partners to apply similar fundamental priorities and will distance ourselves from those who don't."
Boohoo declined to comment.
source: PA
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