StockMarketWire.com - Online fashion retailer Boohoo vowed to launch a probe into its supply chain amid allegations one of its supplier's factories was underpaying staff and failing to protect them from Covid-19.

Boohoo said it was 'shocked and appalled' by the recent allegations and vowed to launch an immediate independent review of its UK supply chain. The findings would be published over the coming months. The publication of terms of reference for the independent review was expected in late July, with a further update in the half-year results expected in September. A further update expected would be provided in July next year, when the group was expected to published a trading performance. The company said it would terminate relationships with any supplier who had not been in compliance with its supplier standards or mistreated any workers.

Boohoo flagged inaccuracies in news report published last week that claimed that one of its supplier's factories was underpaying staff and failing to protect them from Covid-19.

A report in The Sunday Times suggested workers in some supplier factories in Manchester were being paid as little as £3.50 an hour, or well below the UK minimum wage.

'Our investigation to date has not found evidence of suppliers paying workers £3.50 per hour. However we have found other evidence of non-compliance with our Code of Conduct and the Group has taken the decision to immediately terminate its relationship with both suppliers,' Boohoo said.

The company also confirmed early investigations, reiterating that Jaswal Fashions Limited, contrary to the media report, was not and has never been a supplier for the group.

'Investigations over the last 72 hours have highlighted that the order from Nasty Gal was placed with Revolution Clothing, who then instructed Morefray Limited to manufacture in Morocco and repackage the garments on their behalf in Leicester,' Boohoo added.

The company had lost key customers, with Asos, Zalando and Next recently announcing that they had dropped the brand from their websites.

At 9:14am: [LON:BOO] Boohoo Group PLC share price was -29.75p at 231.65p



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