(Reuters) – Fashion retailer Boohoo <BOOH.L> said on Friday an independent review into allegations about working conditions and low pay had found many failings in its Leicester supply chain and recommended improvements to the company’s corporate governance.
Boohoo commissioned the review, headed by senior lawyer Alison Levitt, in July after a damaging British media report about factory working conditions.
“Ms Levitt is satisfied that Boohoo did not deliberately allow poor conditions and low pay to exist within its supply chain, it did not intentionally profit from them and its business model is not founded on exploiting workers in Leicester,” Boohoo said in a statement.
The review found that some workers in its supply chain had not always been properly compensated for their work and that many workers were not fully aware of their rights and their obligations, Boohoo said.
It said it recognised that this was a widespread issue in the garment industry and committed to establishing and funding a Garment & Textiles Community Trust governed by independent trustees to address hardship.
“This (review) has identified significant and clearly unacceptable issues in our supply chain and the steps we had taken to address them,” Boohoo CEO John Lyttle said.
“It is clear that we need to go further and faster to improve our governance, oversight and compliance,” he said.
The company laid out six steps it was taking to improve governance, including appointing new independent directors to its board, making supply chain compliance a standing item at board meetings and the formation of two committees to oversee risks to the business and its supply chain compliance.
Boohoo sells own-brand clothing, shoes, accessories and beauty products targeted at 16- to 40-year-olds.
Its shares were up 17% by 0708 GMT on Friday, on track to regain much of the market value they had lost since the July media report.
(Reporting by Muvija M in Bengaluru; editing by Patrick Graham and Jason Neely)
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