Next and Zalando drop Boohoo over worker rights allegations

Retailers Next and Zalando are delisting products made by Britain’s Boohoo Group following a media report about dire working conditions in an English factory that supplied the popular brand.

Boohoo shares have slumped since the Sunday Times newspaper said workers in a factory in Leicester, central England, making clothes destined for Boohoo were being paid as little as £3.50 ($4.38) an hour.

Boohoo said on Monday it will end relationships with any supplier found to have breached its code of conduct. It could not immediately be reached for comment on Tuesday.

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Next said it had already removed all Boohoo and Pretty Little Thing branded items from all its websites last week in response to a report from workers’ rights group Labour Behind the Label.

“Next concluded there is a case for Boohoo Group to answer,” a spokesman said, adding it had started its own investigation to check the items were sourced in a manner appropriate and acceptable to the retailer.

Zalando said in a statement it would define specific actions to address human rights issues identified in Boohoo’s supply chain and would discuss renewing a commercial relationship only when Boohoo had taken corrective measures.

In addition, Asos has temporarily suspended its trading relationship with all Boohoo brands until Boohoo has completed an investigation and Asos has received assurances regarding supply chain practices, the Financial Times reported, citing a person familiar with the matter.