LONDON — Fast-fashion e-tailer Boohoo.com has once again been targeted for alleged poor labor practices.
The company has been linked to the spike in COVID-19 cases in Leicester, a city in England’s East Midlands region. Some 75 to 80 percent of the garment factories that supply Boohoo are located there. Leicester is under lockdown and sealed off until July 18 due to the dramatic spike in cases of the coronavirus. It is the first U.K. region to have been singled out for separate treatment, even as lockdown measures ease in the rest of the country.
Labour Behind the Label, a campaign that works to improve conditions and empower workers in the global garment industry, made the allegations about Boohoo. It also flagged that most of the city’s garment factories have not been respecting social distancing rules, have been asking workers to continue coming into work even if they are sick and have been accepting government furlough assistance for employees who are still reporting to work.
Boohoo, which trades on the London Stock Exchange and has recently made a raft of fashion retail acquisitions, has not responded to the allegations. In response to earlier claims about the lack of safety in the workplace, Boohoo said it had asked suppliers to follow regulations. Last year it put a 20-person team in place to oversee the Leicester factories that it partners with to ensure fair working conditions.
Separately, Public Health England, the government body that aims to protect and improve the nation’s health and well-being, said its latest research found there was no obvious source of Leicester’s surge in coronavirus cases, and “no explanatory outbreaks in care homes, hospital settings, or industrial processes” were found.
Previous reports by Public Health England have pointed to a “disproportionate risk” for people from minority and low-income backgrounds in contracting COVID-19. Leicester garment factories employ mainly migrant workers, many of whom have South Asian heritage and are paid as little as 3 pounds an hour, in some cases.
Since the city went into lockdown, the U.K. Secretary of State for Business, Alok Sharma, has pledged to investigate the garment industry’s labor practices further.
Boohoo has flourished through the coronavirus crisis: In the first quarter ended May 31, revenues totaled 367.8 million pounds, up 45 percent year-over-year.
It has also been on an acquisitions roll, taking full control of its fast fashion business PrettyLittleThing.com, and picking up the online platforms of British retailers Oasis and Warehouse last month, after they collapsed into administration. The company has also managed to raise cash to strengthen its balance sheet in light of the COVID-19 crisis.
Analysts have highlighted the overall issue of labor practices in the sector, arguing they can impact a company’s performance in the longer term.
“While it is difficult for companies to have direct control over practices of thousands of suppliers (which are most often subcontracted) to ensure fair and safe standards, this is increasingly becoming an expectation both from customers and investors,” wrote Bernstein in its latest report, issued Thursday.
Shares in Boohoo were up 1 percent to 4.03 pounds in afternoon trading on Thursday.