Boohoo hopes new factory will finally shake ‘modern slavery’ allegations
Boohoo Group PLC (AIM:BOO) said work on a new factory in Leicester is underway as it looks to move on from the ‘modern slavery’ allegations that first surfaced 18 months ago.
Employees at the plant will receive pay above the national minimum wage while staff at the site will “enjoy the full range of benefits”, including private medical care and a free allocation of company shares.
Guaranteed 40-hour contracts, 33 days paid holiday and 40% discount on all boohoo brands will be some of the additional perks, according to the company.
The factory, its first ever manufacturing facility, will work with two shifts to “double the job opportunities” and give staff “greater flexibility.”
Situated on the outskirts of central Leicester, the London listed company said the 23,000 sq. ft factory will be multi-purpose.
The site will operate as a training facility for production teams across all its brands, which include PrettyLittleThing and Nasty Gal, as well as a hub to provide education to local students and other groups who are “keen to learn about garment manufacturing.”
“It is more than just a factory, it’s a hub of learning and collaboration, as it gives our own teams the chance to work onsite and an opportunity to see a working factory first-hand,” said chief executive John Lyttle.
“We welcome the opportunity to share that knowledge with the amazing education institutions in the city and strengthen our collaborative working relationships with our approved suppliers. It’s an exciting new chapter for the boohoo Group,” Lyttle added.
Lyttle also knows how important it is for the business to draw a line under the ‘modern day slavery’ allegations it faced in July 2020, following it ever since.
The company was accused of extremely poor pay and working conditions in a supplier garment factory in Leicester, with The Sunday Times alleging that staff were paid just £3.50 per hour and afforded little protection against Covid.
Just a matter of weeks before the news broke, the e-commerce business was rated AA for environmental, governance and social (ESG) policy by MSCI, a rating index provider.
However, a lack of uniformed reporting on ESG issues allows companies to choose what they disclose, opening the opportunity to ‘hide’ any issues that may be a cause of concern to potential investors, said critics.
Shares rose 2.8% to 101p but the company has much to do to achieve highs of over 400p in June 2020 seen just before the scandal broke, according to broker RBC.
The company has fallen behind competitors in product and service, with plenty of investment required to correct these problems, the broker said.
Source: (Proactive Investors)