British clothing group Boohoo, accused of trampling on labor law, dives on the stock market

The British clothing group Boohoo is accused of calling on suppliers with quasi-slavery practices and of having contributed to the spread of the coronavirus, causing its share price to plummet Wednesday.

Read also: Labor law at the heart of litigation

The workers' rights association Labor Behind the Label denounced in a scathing report illegal working conditions and wage levels in the Leicester area where the presence of foci of infection forced the city of central 'England to reconfigure itself.

Society claims to ignore these practices

" How can Boohoo boast 44% growth in the first quarter (...) despite a pandemic? The workers denounce violations of confinement, frauds in government aid for short-time working, and modern slavery in the supply chain , "the NGO tweeted on July 1. Sunday Times article reports journalist who masqueraded as a worker and worked two days at the Jaswal Fashions factory in Leicester was promised wages of £ 3.50 an hour while the minimum wage for an adult over 25 is £ 8.72 in the UK.

The company said it was " horrified " by these allegations and claimed to ignore these practices, promising an investigation for which it hired a renowned quality control expert.

The title plunges on the stock market

" The market is not convinced, however ," said Russ Mold, analyst at broker AJ Bell, who argues that "a review of its supply chain should have been done a long time ago because of allegations of bad practices at its suppliers date back to 2017 ”. The action tumbled 14.61% Wednesday late in the morning and fell 42% since the beginning of the week.

Distributors Next, Asos - also sometimes pinned down for their warehouse practices - or Zalando have announced at least temporarily boycotting Boohoo's products, as have TV stars like Vas J Morgan. " They react too little and too late, " said Mold. " Boohoo is a textbook case of poor ethical practice ," said Michael Hewson, analyst at CMC Markets, noting that it invites us to " think about the nature of + fast fashion + and what lies behind the low prices and the buying clothes, wearing them once and throwing them away, which is not very ethical . ”

The analyst also quips at the double-edged sword of " social networks that can build a brand very quickly with the help of influencers who exhibit the products of a company, but can destroy it as quickly ".