Boohoo’s share price jumps as independent review absolves firm of deliberately allowing poor working conditions
Boohoo’s share price rose by more than 13 per cent in early morning trading after an independent review absolved the fast fashioner retailer of allegations that it deliberately allowed poor working conditions and low pay at its suppliers.
The review was conducted by Alison Levitt QC following the “sweatshop” scandal, which highlighted poor working practices at clothing factories in Leicester where staff were paid as little as £3.50 per hour.
Levitt found “many failings” and has recommended Boohoo make a number of improvements to its corporate governance, compliance and monitoring processes.
The retailer said the review found it could have had a positive impact had it been “willing to take a different approach to how it both views and interacts with the Leicester supply chain”.
It also said: “It has already made a significant start on putting things right.”
Following an internal investigation in the summer, Boohoo confirmed that it had found evidence of non-compliance with its code of conduct and terminated its relationship with two suppliers.
John Lyttle, Boohoo’s chief executive, said: “[The review] has identified significant and clearly unacceptable issues in our supply chain, and the steps we had taken to address them, but it is clear that we need to go further and faster to improve our governance, oversight and compliance.
“As a result, the group is implementing necessary enhancements to its supplier audit and compliance procedures, and the board’s oversight of these matters will increase significantly.”
Boohoo’s representative for the review, deputy chairman Brian Small, thanked Levitt for her “diligent and thorough independent review”.
“We welcome in particular her clear recommendations, which we accept, and as a board are committed to driving up standards in our supply chain and business practices,” he said.
The company’s share price had risen more than 13 per cent at the start of Friday’s trading, opening at 392.50 after closing on Thursday at 324.40. It has since parred some of those gains to settle at around 362.80.