National Crime Agency launches investigation into Leicester's textile industry over exploitation allegations

Marco Green
July 7, 2020

The retailer's shares are still listed on the Alternative Investment Market (AIM), which is generally less liquid and far more volatile than the UK's larger cap stock indexes like the FTSE 100 and FTSE 250.

Rattled Boohoo responded by highlighting its determination "to drive up standards where this is required" and "ensure that everyone working to produce clothing in our supply chain is properly remunerated, fairly treated and safe at work", although the statement didn't do go far enough to placate panicked investors.

Lockdown victor Boohoo's highly rated shares hit fresh highs last month in a blow to short-seller ShadowFall Research. That is well below the United Kingdom minimum wage.

The paper reports that few social distancing guidelines were in place on site, and that most employees worked without masks, despite Leicester facing a localised lockdown as the city battles a spike in coronavirus cases.

Jaswal Fashions was the supplier initially named in a Sunday Times report that alleged staff were working in hot and cramped conditions, without sufficient protective equipment and were paid rates below the minimum wage.

It said its early investigations had revealed that Jaswal Fashions was not a declared supplier and was also no longer trading as a garment manufacturer, indicating that a different company was using Jaswal's former premises.

The retail brand, which owns Pretty Little Thing, Karen Millen, and Nasty Gal, has come under fire ever since a report from a workers' rights group surfaced about Boohoo allegedly putting workers at risk of contracting Covid-19 at its Leicester factories.

The National Crime Agency has launched an investigation into Leicester's textile industry over allegations of exploitation - while the fashion firm Boohoo says it's investigating one of its suppliers in the city - saying they will take a zero tolerance approach, and end relationships with anyone found to be flagrantly flouting the law. We are unsure on this front and will watch developments with interest but we do highlight that many younger shoppers do have a particular interest in business ethics, labour practices and sustainability. Hence, the group will no doubt be praying that this is not analogous to a Gerard Ratner moment'.

A story in the Sunday Times claimed conditions in the factory were akin to modern-day slavery.

Broker Liberum said Boohoo should "show leadership and once and for all and deal with these concerns head on".

Other reports by Click Lancashire

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