Boohoo kicks off search for new auditor as PwC steps down
Controversial fast fashion retailer Boohoo (BOO) has launched a search for a new auditor, with PwC stepping down in the wake of a report into abuses in the clothes company’s supply chain.
Boohoo said in a statement that it had “recently launched a competitive tender process for the group’s audit”. It said that PwC – its auditor since before it went public in 2014 – “is not participating in this process”.
It confirmed media reports that PwC was preparing to step down from its long-standing role.
Fast-fashion retailers have long faced criticism for their labour practices. They specialise in making very cheap clothes that are often only worn once.
Boohoo became embroiled in a scandal in the summer when a workers’ rights group flagged serious abuses at Leicester garment factories that supplied the company.
The Sunday Times reported that workers at a factory in Leicester were being paid as little as £3.50 an hour. That is far below the UK’s minimum wage.
The Labour Behind the Label group also said workers were being forced to come in despite being sick with coronavirus.
‘Many failings’ at Boohoo
Boohoo said it was “appalled” and hired top lawyer Alison Levitt to conduct a review into the allegations. She found “many failings”.
Levitt concluded that some workers in the company’s supply chain were not always paid properly. And she said the company took no responsibility for the conditions of people making their clothes.
However, she found that Boohoo did not intentionally profit from the poor conditions and underpayment in the factories.
PwC’s decision to step away comes after other UK auditors reviewed controversial relationships. PwC declined to comment.
Grant Thornton stepped down last year as auditor to Sports Direct, now called Frasers Group. It did so when the retailer said it was under tax investigation in Belgium.
Deloitte stepped down as auditor of EG Group this month. Reports said this was due to concerns over governance and controls.