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Summary
- UK-based online clothing company Boohoo’s share prices fell sharply on Tuesday.
- US-based charity organisation Liberty Shared filed two petitions against the company over potential forced labour practices at its Leicester factories.
UK-based online clothing company Boohoo’s (LON: BOO) share prices fell sharply on Tuesday after reports emerged US-based charity organisation Liberty Shared filed two petitions alleging unfair labour practices at its Leicester factories. The petitions were filed with the US customs and Border Protection agency.
The share prices fell on the back of a possible US ban on the company and its several suppliers accused of the use of forced labour in its Leicester-based factories. The company’s spokesperson said it had not been notified of any investigations in this regard. The charity organisation had filed two petitions in early February against the company claiming insufficient actions taken against alleged labour practices at its factories.
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The retail company’s supply chain labour practices have been under scanner over the past one year. An independent review commissioned by Boohoo reported that while the company had overlooked labour issues in favour of its bottom line, it did not have any direct involvement with labour code violations.
The US holds a strong stance against forced labour practices and has already banned several products worldwide such as diamonds mined in Zimbabwe and furniture made in Mexican jails amongst others.
The online retail company’s US sales were £263.6 million last year, accounting for more than 20 per cent of its total revenue.
Separately, the company recently acquired popular retail company Debenhams in January this year.
Do read: Boohoo (LON:BOO) Takes Over Debenhams for £55 Million
Share Performance
The company’s (LON: BOO) shares were trading at GBX 329.62, down by 4.37 per cent as of 2 March at 9:52 am GMT+1 following the news.
