New Look has launched an inquiry into its supply chain following a Channel 4 TV investigation which revealed the value chain was using poor working conditions in a factory in Leicester.

The retailer has launched an internal inquiry and also hired Ernst & Young to undertake an independent review. It has pledged to reimburse the factory workers to take their wage up to the minimum £5.93 an hour.

The programme, called Fashion’s Dirty Secret, found workers in a Leicester factory making clothes for retailers such as Bhs, Peacocks and New Look, for as little as £2.50 an hour.

New Look chief executive Carl McPhail said he took the findings in the investigations “incredibly seriously”.

New Look results released yesterday showed group like-for-likes fell 3% in the 26 weeks to September 25 after the value chain came up against strong comparatives and was impacted by the disruption caused by the relocation of its head office to London.

The like-for-like sales drop was more marked in the UK, where like-for-likes over the period fell by 4.5% compared with a 7.5% increase the same period a year ago when total group like-for-likes were also ahead 1.8%.