Jefferies impressed by ‘robust’ Boohoo response3 Aug 2021 07:29
Boohoo (BOO) has been hit by accusations that workers in its supply chain continue to be ‘exploited’ – reprising a scandal that broke a year ago – but broker Jefferies has been impressed by the company’s response.
A Sky news article at the end of last week reported that workers in some Leicester garment factories continue to be underpaid, although there is no implication that Boohoo knew about the practice.
On Friday, the company issued a statement in response, committing again to the ‘highest ethical standards’. It detailed substantial improvements made to the UK supply chain so far, stating that suppliers are now visited more frequently, sub-contracting has been removed, products are only purchased from the approved supplier list, and technology is being used for forensic monitoring.
Anti-slavery charity Hope for Justice also commented in support.
‘We see this as a robust response from Boohoo, highlighting the improvements made to its UK sourcing over the last year and making clear its commitment to operate an ethically sound supply chain,’ said Jefferies analyst Andrew Wade.
The shares fell 2.9% on Friday, recovering from steeper losses earlier in the day. They made that ground back up on Monday, closing up 2.9%, or 7.6p, at 269p.
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I have a continuous suspicion that Boohoo recommendations are being reported deliberately limp.