Fashion Giant, Boohoo group, which owns Boohoo, PrettyLittleThing, Nasty Gal and MissPap has seen profits soar 51 per cent amid a row over low pay and poor working conditions for factory staff supplying the fast fashion firm.
The group today reiterated a pledge to make ‘long-lasting and meaningful change’ to the business after a damning report last week found ‘serious issues’ in its supply.
Alison Levitt QC was hired by Boohoo to review its business practices she found there was evidence of staff at the Leicester factories working in poor conditions for low pay – and that company bosses knew about the issues for months before the scandal was exposed.
In May 2018 the Financial Times published a story about ‘labour exploitation in Britain’s garment industry’ which questioned how Boohoo was able to sell dresses so cheaply.
Boohoo, which accepted the recommendations in last week’s review and set out steps to improve working practices in the Leicester factories, insisted when unveiling half-year results that it can make the changes ‘without impacting lead times or financial expectations’.
Boohoo now expects annual sales to jump by 28 per cent to 32 per cent against the 25 per cent hike it previously pencilled in.
It also nudged up guidance for profit margins to around 10 per cent for the year from 9.5 per cent – 10 per cent previously.
Boohoo said robust trading continued into September in a ‘good start’ to the second half of its financial year.
Links between a Boohoo co-founder and a factory in Leicester accused of paying staff less than the minimum wage first emerged earlier this year.
The brand confirmed that the factory at the heart of the ‘human trafficking and slavery’ allegations is run by Morefray Ltd, a Manchester-owned firm with ties to the I Saw It First fashion firm – set up by Jalal Kamani, who founded Boohoo with his brother Mahmud.
The scandal came to light after an undercover reporter working at the Morefray factory was told to expect pay of £3.50 an hour.
An employee at Faiza Fashion – a factory allegedly producing clothes for Boohoo and Mahmud’s sons’ retailer Pretty Little Thing – told how the factory did not provided its workers with face masks or gloves.
And The Sunday Times reported allegations that workers in a second factory, which makes clothes for Boohoo brand Nasty Gal, were being paid as little as £3.50 an hour and operating without social distancing measures in place.
CEP Pretty Little Things, 32-year-old Umar, develop a personal wealth of more than £1 billion.
His wealth has allowed him to buy a fleet of cars, including two Rolls-Royce Phantoms, a £300,000 Lamborghini Aventador, a £92,000 customised G-Class Mercedes and a high-end Range Rover.
Umar hit the headlines in May after it was revealed that he furloughed 86 members of staff at his Manchester-based company – while he enjoyed a spa in Dubai.