A Breakdown of the Boohoo Bombshell

The online retailer owns brands including Nasty Gal and PrettyLittleThing and are some of the leading online fast-fashion retailers in the UK and Australia.

What Happened?

An undercover reporter from The Sunday Times stated that some of the workers aligned with the online retailer, Boohoo, and its subsidiary brand, Nasty Gal, may have been paid below minimum wage in the supply chain companies in Leicester.

Boohoo has been accused of ‘modern-day slavery’ in its subcontractor factories in Leicester, UK after reports found that its workers were being paid £3.50 (AU$6.27) an hour during the COVID-19 pandemic. The minimum wage for a worker aged over 25 in Britain is £8.72 ($19.86).

Furthermore, the report found that its workers may have not been protected from the coronavirus outbreak by not wearing masks in the workspaces.

As a result of this investigation, Boohoo’s shares dropped by 23 percent on Monday, 6th July. Since then, it has continued to slump another 14.2 percent. Online retailer, ASOS, has since dropped Boohoo from its stores.

The Independent Review

Since the report was released, Boohoo has announced it would conduct its own independent review of the UK supply chain.

Boohoo announced it would invest £10 million (AU$18 million) to ‘eradicate supply chain malpractice’  – it has also severed ties with two suppliers that have been accused of the poor work conditions.

The Chief Executive of Boohoo, John Lyttle, said the investigation was intended to “to show how seriously we are taking the issue”, he told the Financial Times.

In a statement from the board, representatives of Boohoo said the company was ‘shocked and appalled’ by the accusations. “We are committed to doing everything in our power to rebuild the reputation of the textile manufacturing industry in Leicester,” the statement read. “We want to ensure that the actions of a few do not continue to undermine the excellent work of many suppliers in the area.”

The Outcome

Seven agencies have since visited the Leicester factories since the report was released, including GLAA, Leicestershire Police, Leicester City Council, the National Crime Agency, Health and Safety Executive, Leicestershire Fire and Rescue and Immigration Enforcement.

Authorities in the UK came to the conclusion that there is no evidence of ‘modern slavery’ offences in the Boohoo subcontractor sites.

The Gangmasters and Labour Abuse Authority have said that ‘no enforcement has been used during the visits’. “Officers have not at this stage identified any offences under the Modern Slavery Act”, the report found.

Representatives from Boohoo said it ‘welcomed’ the opportunity to work with authorities to ‘eliminate any instances of labour malpractice in Leicester’.

Boohoo said in a statement that it will be working to rebuild the reputation of the textile industry in Leicester. “We will not hesitate to terminate any relationships where non-compliance with our code of conduct is found,” Lyttle explained.

One of the companies that were mentioned in The Sunday Times article is said to never have been a supplier for the fast-fashion company. It’s also been found that there’s ‘no evidence’ that its workers have been paid under the minimum wage.

Boohoo plans to share an update from its supply chain review in September along with its HY results. Further updates will be shared in January 2021.

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