Two of Boohoo’s biggest investors have promised to engage with the online fashion giant over allegations of modern slavery at Leicester clothing factories.

Merian Global Investors, now part of Jupiter Group, and Baillie Gifford, told Retail Week that they would work with Boohoo to address the issues raised after an undercover investigation by The Sunday Times revealed workers at a Leicester supplier apparently producing goods for the Nasty Gal business were paid as little as £3.50 per hour.

The supplier, operating under the name Jaswal Fashions, was also reported to have had few PPE or social distancing measures in place.

A third investor, Invesco, said they were committed to investigating the claims.

A spokesperson for Merian said: ”We are aware of the accusations made regarding Boohoo’s clothing suppliers in Leicester. We have been actively engaging with the company on this topic and have previously undertaken site visits to several of Boohoo’s UK suppliers to further understand the firm’s approach to the complex issue of supply chain management.

“We have been given strong assurances by management that any suppliers found to be in breach of the company’s strict code of conduct will be terminated immediately and we will continue to engage with the firm regarding this situation.”

A Baillie Gifford spokesperson said: “We recognise the challenges and are working with the company to increase its oversight and assurance of supply chain business practices and working conditions.”

Invesco said: “While we don’t generally comment on rumours in the press about the companies we invest in, we take issues of company governance very seriously and will be investigating these reported concerns to assess their circumstances and validity.”

Continued engagement by big shareholders will be welcome news for Boohoo. In the wake of the allegations, the etailer’s share price had plunged 23% at the time of writing, cutting its valuation by more than £1bn.

Boohoo said earlier today: “Our early investigations have revealed that Jaswal Fashions is not a declared supplier and is also no longer trading as a garment manufacturer. It, therefore, appears that a different company is using Jaswal’s former premises and we are currently trying to establish the identity of this company.

“We are taking immediate action to thoroughly investigate how our garments were in their hands, will ensure that our suppliers immediately cease working with this company and we will urgently review our relationship with any suppliers who have subcontracted work to the manufacturer in question.

“We are keen and willing to work with local officials to raise standards because we are absolutely committed to eradicating any instance of non-compliance and to ensuring that the actions of a few do not continue to undermine the excellent work of many of our suppliers in the area, who provide good jobs and good working conditions.”

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