In a devastating blow to Boohoo, the fashion brand’s shares plummeted even further following the revelation of its alleged involvement with illegal factories in Leicester. Shares closed at 297.3p on Monday, a significant decline from Friday’s closing price of 385.5p. The decline continued on Tuesday morning, with the share price dropping to 256p. Consequently, Boohoo’s market capitalization now stands at only £3.22 billion, a far cry from its previous peak earlier this year.

These damning allegations against Boohoo were uncovered by an investigation conducted by the Sunday Times. The investigation revealed the existence of an undisclosed factory in Leicester that paid workers below the UK’s legal minimum wage, offering a paltry £3.50 per hour. Furthermore, there were reports of unsafe working conditions in these factories, as the pressure to meet deadlines led to inadequate social distancing measures. This, in turn, contributed to the surge in COVID-19 cases in Leicester.

Boohoo has responded to these claims by pledging to urgently investigate the matter and impose stricter oversight of its supply chain. However, doubts still linger among both investors and the general public. The incident has also raised concerns about sub-contractors within the broader garment industry in Leicester. Previous investigations into fast-fashion brands have exposed substandard working conditions, with factories that violate regulations simply reopening under new names within a matter of days after being shut down.

The long-term impact of these revelations on Boohoo’s reputation and future prospects remains uncertain. Despite its rapid growth and success, the brand is now marred by allegations of exploitation and disregard for workers’ rights. As consumers increasingly prioritize ethical practices and sustainability within the fashion industry, Boohoo may encounter significant challenges in regaining trust and recovering from the damage inflicted by these damning revelations.

Ultimately, this exposé sheds light on the wider issues plaguing the fast-fashion industry and the exploitation of workers. It serves as a stark reminder of the urgent need for stricter regulations, enhanced oversight, and greater transparency within the garment manufacturing sector. Only through comprehensive reforms can the industry effectively tackle the systemic problems that have perpetuated unethical practices, ensuring a fair and sustainable future for workers and the environment.

For more information on the investigation and Boohoo’s response, please visit: Link 1.
To learn about the broader issues surrounding the fast-fashion industry, visit: Link 2.