(Bloomberg) — Boohoo Group Plc said it suspended business with some suppliers following reports that clothing sold by the online retailer may be made in factories paying less than minimum wage.
Shares of the clothier fell as much as 17% in afternoon trading in London after the Guardian cited auditors’ findings that more than a dozen U.K. suppliers may be paying substandard wages. The newspaper said at least 18 businesses, eight of which denied some or all of the claims, couldn’t prove they were compliant.
The company’s own investigations “have highlighted similar issues” at an unspecified number of factories, a Boohoo spokesman said in a statement, and the company has suspended business with those firms.
Boohoo, which owns the Nasty Gal label, said it’s sharing its findings with organizations such as Slave Free Alliance to ensure workers are treated fairly and paid appropriately. In July, an investigation by the Sunday Times found workers supplying clothes to Boohoo were being paid an hourly wage of as little as 3.50 pounds ($4.70).
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