RE: Prepare for a share price crash on Monday5 Jul 2020 16:30
Forbes says: With Allegations Of Slavery And Unsafe Working Conditions, Is Boohoo The Unacceptable Face Of Fast Fashion?
Boohoo, owner of brands such as Pretty Little Thing and Nasty Girl has found itself embroiled in yet more controversy with claims that it is paying workers as little as £3.50 an hour according to an undercover Sunday Times investigation.
And this comes just days after it was revealed that a likely source of the increase in COVID-19 in the Leicester area, leading to a full lockdown being imposed last week, is from the garment factories in the City. It is thought that up to 75% to 80% of the garments made in Leicester factories are destined for Boohoo.
Even before these revelations, investors were revolting against a planned remuneration package which would see its leadership team net a total of £150 million between them if the market capitalisation of Boohoo reached £6 billion. It currently stands at £4.9 billion, more than double that of Marks and Spencer.
It is hard not to admire Boohoo in some ways, for theirs has been a stellar rise, fuelled by supreme agility and total commitment to engaging with their customers. They understand the power of social media better than most and they know what their customers want. Fast, affordable, in the moment fashion.
And that agility is paying off, last month's Q1 trading statement showing a 45% increase in group revenue for the three months to May 31, remarkable given that this was when we were all in lockdown and not able to go out.
But what Boohoo did so expertly was to pivot from the Saturday night out Instagrammable outfit, to the sofa gear. And they did this with lightening speed.
Fast Fashion Comes At A Price
And of course, they rely on their customers not quite bothering to trouble their collective conscience with where and especially how, their new clothes are manufactured. Let's face it, how many of us take the trouble to check the label to see where our clothes have been made and find out about the working conditions before we purchase? Thought not.
Because affordability and speed to market are key, and in any case, what could possibly be wrong with buying British? Well, it now appears the answer is, plenty.
According to a Sunday Times undercover reporter, the same factory supplying the Nasty Gal brand, which paid their workers £3.50 an hour (minimum wage in the U.K. is £8.72 per hour for those over the age of 25) was also still operating during the coronavirus lockdown in Leicester last week.
And it seems that this has cut through. Only last week, the home secretary, Priti Patel, asked the National Crime Agency (NCA) to investigate claims of modern slavery in Leicester's clothing factories, describing the allegations as "truly appalling". Adding that, "I will not tolerate sick criminals forcing innocent people into slave labor and a life of exploitation.
Sign In
Follow the stocks
