Boohoo’s shares plunged by £1.3 billion today after Priti Patel asked Britain’s FBI to investigate the fast fashion chain over claims they were using an alleged £3.50-an-hour sweatshop in Leicester to produce cheap clothing during the coronavirus pandemic.
The Home Secretary has stepped in and instructed the National Crime Agency to probe the issues amid claims the factories were operating without social distancing measures in place with workers not all wearing masks.
Ms Patel has called the allegations ‘truly appalling’ and vowed to clamp down on modern slavery in Britain.
And today Boohoo’s share price collapsed by as much as 25% – falling more than 93p to £2.75 by early afternoon.
It came as Leicester’s coronavirus cases spiralled in June and claims that these factories were producing items for some of the UK’s biggest fashion brands including Boohoo and Nasty Gal while putting staff at risk of contracting Covid-19.
An NCA spokesman said: ‘Within the last few days NCA officers, along with Leicestershire Police and other partner agencies, attended a number of business premises in Leicester area to assess concerns of modern slavery and human trafficking’.
Boohoo’s shares have fallen off a cliff after questions were raised about the factories they use and the police were called in to look at ones in Leicester running during the pandemic
Pictured: Workers at the Faiza Fashion factory in Leicester continue to work despite the newly reimposed lockdown
Earlier this week it was revealed that clothes workers in Leicester were being paid as little as £3.50 an hour to produce items for some of the UK’s biggest fashion brands including Boohoo. Pictured: Boohoo models (left and right)
The Mayor of Leicester had been warned that some manufacturing companies were breaching Covid-19 social distancing guidelines three months ago, a former minister has claimed.
Sir Peter Soulsby, 71, and his Labour councillors received a letter from politicians in the Conservative Party warning them of the ‘shuttered premises’ in which textile workers were operating in amid the coronavirus lockdown.
The Indian-born billionaire and his playboy son who began the Boohoo fast fashion brand from a Manchester market stall
Mahmud Kamani, pictured right, alongside his son, didn’t want to spoil his children, but helped them set up Pretty Little Thing
Mahmud Kamani, 55, started out running a Manchester market stall and launched Boohoo in 2006, now worth £2.6 billion, with his son Adam on board.
Mahmud’s other son Umar, 32, is CEO of clothes retailer PrettyLittleThing, which his father’s Boohoo Group bought a 34 per cent stake in for £269.8 million in May.
The billionaire clothes retailer’s own father Abdullah Kamani went to school in Gujurat, India. He moved the family to Kenya, where many Indian families had prospered in the British Empire.
Mahmud was born there in 1964, but four years later the Kamanis were forced to flee to Britain by increasing unrest and draconian employment laws that favoured native Kenyans.
They settled in Manchester, where the entrepreneurial Abdullah sold handbags on a market stall to feed his family, before investing in property and founding the wholesale textile business Pinstripe, where Mahmud worked, using family connections in India to source garments.
By the early 2000s, the firm was selling nearly £50 million of clothing a year to High Street names such as New Look, Primark and Philip Green’s Topshop.
Umar Kamani CEO & Founder PrettyLittleThing.com posted this image on his instagram page of him on his Rolls-Royce Dawn in Beverly Hills
Umar Kamani, pictured with Tulisa Contostavlos, is regularly seen mixing with celebrities
Spotting the potential in the growth of the internet, Mahmud set up his online retailer in 2006 that would deliver their own-branded fashion at rock bottom prices, starting out with just three staff and operating out of a Manchester warehouse.
Today it has a workforce of over 1,000, and celebrity advocates including everyone from Little Mix to Tallia Storm.
Tatler named Umar Kamani its eighth most eligible bachelor for 2019, alongside the Duke of Roxburghe and former One Direction star Harry Styles.
His lifestyle is decidedly jet-set, with his contacts book brimming with A-list stars such as Jennifer Lopez, rapper P Diddy and actor Denzel Washington. Such is his self-belief that when he wanted to launch PLT in the US three years ago, he offered a six-figure sum to reality TV star Kylie Jenner, half-sister of Kim Kardashian, to appear in one of his £15 orange dresses.
‘It’s all about the hustle,’ he says, with a shrug. ‘I knew I wanted to be in those circles because I’m obsessed with power.’
Popular girl band Little Mix, pictured, launched a Pretty Little Thing collection last year
Power duly followed. The Kylie Jenner coup led to sales increasing ten-fold and allowed him to buy a seven-bedroom mansion in the Hollywood Hills, complete with basketball court.
His Instagram account reveals the very caricature of a playboy – lunching at Nobu in Malibu wearing Gucci slippers, hanging out with P Diddy at the Grammys and Kylie Jenner at Coachella music festival, and posing at the wheel of a yacht on Italy’s Amalfi Coast.
‘A lot of these people are my friends,’ he says. ‘Will.I.Am is a really good mate – we FaceTime nearly every day – as is P Diddy. I was at the LA Lakers game with Denzel Washington a few weeks ago too.’
Love Island stars such as Molly-Mae Hague and girl band Little Mix are among the celebrities to have publicly endorsed the Pretty Little Thing brand in recent years, with other celebrities including Kylie Jenner, Khloe Kardashian, Nicole Scherzinger and Paris Hilton also seen wearing the label.
It has helped 32-year-old Umar Kamani, regularly seen enjoying a luxurious lifestyle on Instagram, 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.
Baroness Verma went on to claim that it was an ‘open secret’ that factories were open and were risking the health of their workers and the local population in Leicester.
Yesterday Baroness Verma, who served as Parliamentary Under Secretary of State at the Department for International Development from 2015 until 2016, told The Sunday Telegraph: ‘It was an open secret that the factories were open. The concerns were about the conditions in which some of them were operating.’
In an email sent to Labour councillors in Leicester on April 18, Conservative politicians questioned if the party was ensuring that the activities inside factories were being reported to the police and trading standards.
The letter, seen by The Sunday Telegraph, read: ‘We have had a number of people contacting us in fear that factory owners are flouting the law by appearing closed but with employees still working behind shuttered premises.
‘This is not only dangerous to the workers in the factories but also to the families and wider communities at large.’
Leicester’s deputy city mayor Cllr Adam Clark said: ‘We are told that Public Health England have found no evidence to suggest that the rise in cases in the city is linked to the textile industry.
‘Significant community testing is now under way in Leicester and workplaces and factory settings will be an important part of this in helping us to track and prevent the further transmission of the virus.
‘Complaints about textile factories operating during the lockdown in April were referred to the Health and Safety Executive for investigation. Last week we were made aware of other allegations.
‘These factories were visited by HSE and the police last week. Verbal advice was given, but no notices were served and none of the factories were required to close.’
Earlier, Matt Hancock said he had ‘quite significant concerns’ about employment practices at clothing factories in Leicester amid reports one paid its staff less than the minimum wage.
The Health Secretary also told Sky’s Sophy Ridge On Sunday programme there had been coronavirus outbreaks at food and clothing producers in the city, as he stressed stopping the spread of coronavirus was ‘the number one problem’.
Mr Hancock said: ‘Well we’ve seen outbreaks in food factories and in clothing factories. There are some quite significant concerns about some of the employment practices in some of the clothing factories in Leicester.
‘They are important problems to deal with, but the number one problem that we’ve got to deal with is getting this virus under control.’
His comments come after the Sunday Times reported allegations that workers in Leicester’s Jaswal Fashions factory making clothes for Boohoo brand Nasty Gal were being paid as little as £3.50 an hour and operating without social distancing measures in place.
The findings have prompted an investigation by the National Crime Agency, with the allegations labelled ‘appalling’ by Home Secretary Priti Patel.
The undercover report by The Sunday Times also found that no additional hygiene or social distancing measures were in place, despite the city being in a localised lockdown due to an outbreak of the virus.
In covert footage, the undercover reporter recorded himself packing garments clearly labelled as ‘Nasty Gal’.
He was also approached by the factory foreman, who warned: ‘These motherf***ers know how to exploit people like us. They make profits like hell and pay us in peanuts.
‘Take me for instance, I’ve been working for so many years in this industry, I’ve been here for five years but never could I take a proper pay packet. I’m still only on just over £5 an hour.’
Following the shocking footage, the NCA said in a statement: ‘Within the last few days NCA officers, along with Leicestershire Police and other partner agencies, attended a number of business premises in Leicester area to assess concerns of modern slavery and human trafficking.’
This week manager of Faiza Fashion in Leicester, Asim Ali, told MailOnline that all the garments they manufacture are for Boohoo and Pretty Little Thing (PLT), two of the country’s leading online clothing brands.
He said: ‘All our work is for these two companies and it is the same for all the other garment manufacturers in Leicester. We do not deal directly with them but are given the orders by middle companies who liaise with them.
‘We opened earlier than expected during the first lockdown because there was such an increase in online clothes shopping. Since then, work has not stopped. We are inundated with orders because so many people are buying online.’
Mr Ali added: ‘In the old days we used to get orders for high street shops but all of that has now stopped. The fashion industry has now changed, there are constant demands for new lines which means we have to work even harder to make clothes.’
Meanwhile Mohamed Talati, 55, who runs 21 F.C. Ltd, a cloth cutting company that provides cloth to the factories told MailOnline: ‘The whole industry is very busy at the moment because there are so many orders to complete.
‘Most of them need to do be done within a week and since the coronavirus pandemic, online clothes shopping has increased, which is good for us.
‘Factories around here simply cannot afford to close. Many did during the first lockdown but reopened early because there was such a huge demand for clothing.
‘There are only two companies keeping the Leicester garment industry going and that is Boohoo and PLT. Without them there would not be any business. ‘
Boohoo, whose CEO Mahmud Kamani is reported to be worth £1 billion, has already come under fire for allegedly risking the spread of coronavirus in Leicester after claims that factories supplying the online retailer told staff to come into work during lockdown despite being sick.
North West Leicestershire MP Andrew Bridgen raised the alarm about clothes factories in Leicester in January after being approached by whistleblowers about the illegal practices allegedly employed in some of the city’s clothing factories.
Mayor of Leicester Sir Peter Soulsby, 71, and his Labour councillors received a letter from politicians in the Conservative Party warning them of textile factories breaching Covid-19 guidelines
Factory workers at Faiza Fashion in Leicester operate their sewing machines despite the risk of contracting Covid-19
Baroness Verma, who served as Parliamentary Under Secretary of State at the Department for International said it was an ‘open secret’ that factories were open
Asim Ali (left), 34, who is manager of Faiza Fashion in Leicester, said he had not received any guidance from the government while Mohmed Talati (right), 55, who runs 21 F.C. Ltd, a cloth cutting company, also complained about the lack of official guidance
Nasty Gal and Boohoo.com are renowned for affordable fashion, with crop top (left, example) going for as little as £4 in a sale, and dresses (right, example) as low as £8
At a factory named as Jaswal Fashions, where clothes at bound for online giant Boohoo and Nasty Gal, employees are said to work for less than half the national minimum wage without health and safety protections against coronavirus
Priti Patel, the home secretary, asked the National Crime Agency (NCA) to investigate modern slavery in Leicester’s clothing factories.
Responding to the investigation, Home Secretary Priti Patel said: ‘These allegations are truly appalling and I commend the Sunday Times and local MP Andrew Bridgen for their roles in uncovering such abhorrent practices.
‘I will not tolerate sick criminals forcing innocent people into slave labour and a life of exploitation.
‘Let this be a warning to those who are exploiting people in sweatshops like these for their own commercial gain.
Responding to the investigation, Home Secretary Priti Patel said: ‘These allegations are truly appalling and I commend the Sunday Times and local MP Andrew Bridgen for their roles in uncovering such abhorrent practices’
‘This is just the start. What you are doing is illegal, it will not be tolerated and we are coming after you.’
A statement from Nasty Gal seen by the Times said the company would investigate the claims, but insisted that Jaswal Fashions was not a ‘direct supplier’.
‘Nasty Gal does not allow any of its suppliers to pay less than the minimum wage and has a zero-tolerance approach to incidences of modern slavery,’ it said.
‘We have terminated relationships with suppliers where evidence of non-compliance with our strict code of conduct is found.’
MailOnline have contacted Boohoo.com for comment.
Boohoo previously told the BBC that it was maintaining closer ties with its suppliers and would be investigating the allegations.
In a statement to the BBC the UK manufacturer said: ‘The Boohoo group will not tolerate any incidence of non-compliance especially in relation to the treatment of workers within our supply chain.
‘We have terminated relationships with suppliers where evidence of this is found.’
On Friday, Leicestershire Police said they had carried out routine visits at nine workplaces in the city to ensure health and safety.
No closure orders were issued and no enforcement was used, the force said.
Detective Inspector Jenni Heggs added: ‘We are aware of recent reports in the media of factories in Leicester continuing their operational work despite being in a period of lockdown.
‘We have been working with partners sharing information to carry out these visits which we will continue to do going forward.’
The shocking claims come in the same week it was revealed the Leicester mayor flouted the coronavirus lockdown to go and see his partner Lesley Summerland, 64, and carry out maintenance on her home throughout April and May.
Neighbours filmed the Labour Mayor at Ms Summerland’s home on several occasions as he arrived ‘carrying overnight bags and shirts.’
On Monday, Leicester and parts of the surrounding area were placed back into a local lockdown following a spike of Covid-19 cases.
People are also banned from staying overnight at another household, and those in the restricted area can no longer visit people in private gardens or indoors, and could face fines if they flout rules.
Leicester’s fast fashion to die for: Cramped ragtrade workshops in the pariah city where staff on as little as £4 an hour reveal they dare not go home if they have Covid symptoms… is this the REAL reason it’s been quarantined?
How do you turn a profit on a £5 party dress, a £6 miniskirt or £3 bikini top if you’re a fashion house or online retailer?
You have them made in Leicester – in the vicinity of St Saviours Road to be precise – where there are around 1,000 clothes factories.
Some are concealed in terraced homes and garages but other companies proudly display the name of their business in bright letters outside.
Among the 35 staff at one particular factory – which supplies the online brand Boohoo – is Imtiaz, who is employed as a packer.
Factories near St Saviours Road in Leicester pay staff as little as £4 an hour in order to turn a profit on cheap clothing supplied to online retailers including Boohoo. Pictured: A £5 party dress sold by Boohoo, advertised as ‘perfect for transitioning from day to play’
Working from 8am to 9pm, Imtiaz, 39, tells me he is paid only £4 an hour despite the minimum wage in Britain for those aged 25 and over being £8.72.
Hence the reason, perhaps, why this corner of the Midlands – locked down again this week due to a spike in cases – has become a manufacturing hub for certain cut-price popular brands.
Is there a place outside the sweatshops of the Far East where garments can be produced more cheaply? Doubtful.
Imtiaz arrived from Gujarat, India, on a tourist visa more than 20 years ago and he has not left the UK since.
He said: ‘Some workers have been feeling unwell but are too scared not to come to work as they might lose their jobs. I had some of the symptoms but didn’t want to tell the boss because they don’t like it if we don’t show up for work.’
Imtiaz is not alone. A female machinist at another factory, Faiza Fashion, spoke to the Mail this week and gave a chilling picture of life at these establishments.
The mother of three in her 50s, who we have decided not to name, said: ‘Three weeks ago, I wasn’t feeling well and there were others who also had flu-like symptoms. But what can you do? We are not rich people and need money to survive.’
She also said they are not provided with face masks or gloves from the factory.
Many will be surprised to learn that Faiza Fashion is still open like most of the clothes factories in Leicester despite the local lockdown.
The company also supplies Boohoo, Britain’s fastest-growing online fashion retailer, which incidentally during the lockdown advertises its £5 dress as ‘perfect for transitioning from day to play’.
Government guidelines might require non-essential shops to shut but factories are not subject to the same measures as long as they observe social distancing rules and follow protocols, including wearing face masks and the provision of sanitisers.
Our inquiries suggest a number of such establishments are not observing these rules. But, still, they remain open.
Imtiaz, who did not give his surname, epitomises the demographic that according to Andrew Bridgen, MP for North West Leicestershire, has created the ‘perfect storm’ for the virus.
The lockdown boundary map surrounding Leicester which has been enforced after spike in coronavirus cases
In an interview with LBC this week, the MP said: ‘We’ve got a much bigger Indian subcontinent population in Leicester, it tends to be multi-generational households.
‘So you’ve got young people going out, perhaps coming home with no symptoms and grandma and grandad go into hospital.
‘We also have a garment industry in Leicester which should have locked down but has worked for internet retailers throughout.’
Can it be a coincidence that the area at the epicentre of the coronavirus outbreak is in the eastern side of the city where most of the garment factories are situated?
Such clothing businesses have become known locally as ‘dark factories’ echoing the ‘dark Satanic mills’ of William Blake’s famous verse describing the exploitative working practices after the Industrial Revolution.
The conditions are an open secret, or rather, Leicester’s ‘dirty secret’ and were investigated by Channel 4’s Dispatches in 2017.
They found factories making clothes for River Island, New Look, Boohoo and Missguided were paying workers as little as £3 an hour in conditions that fell short of health and safety standards.
And an inquiry by Parliament’s Human Rights Commission three years ago found that between a third and three quarters working in these factories were paid below minimum wage and were working in unsafe environments.
Most are from minority ethnic groups, with around 33.6 per cent born outside the UK.
Yet not so long ago, Leicester had a regulated textile industry which was a source of pride as well as prosperity – enjoying the boast of being the ‘city that clothes the world’.
By the early 2000s orders ended up going to the other side of the world. The demand for ‘fast fashion’ – low wages and low prices – reversed this trend. Speed was the USP, which meant sourcing close to home.
Faiza Fashion is just one of the businesses which supplies Boohoo and sister brand PrettyLittleThing, said manager Asim Ali. But it does not deal directly with Boohoo or PLT as the work is sub-contracted to them.
The charity Labour Behind the Label has accused Boohoo of failing to do enough to monitor conditions at factories in Leicester.
The retailer said it would look into the claims but insisted it had ‘followed and adhered to all aspects of [Government] guidance’.
Boohoo was founded in 2006 by Mahmud Kamani and Carol Kane and the company is now worth more than £3billion.
Some retailers have severed ties with suppliers in the area for fear of being accused to making fat profits on the backs of workers like Imtiaz. A few blocks away from Faiza Fashion is Glory Fashion.
The owner Sajid Patel is in the process of renting the premises out and he believes ‘about 80 or 90 per cent’ of clothing factories are open at the moment and that not all of them were complying with lockdown requirements.
We also tried Cute Girl, which specialises in making clothes for young women.
The boss Richu Uppal, who lives in a £500,000 detached house on the outskirts of Leicester and drives a £20,000 Mercedes A Class, was not available to be interviewed.
Quiet streets in the centre of Leicester after the introduction of a local lockdown on Monday following a spike in the number of coronavirus cases
While the rest of Britain prepares to reopen, the city of Leicester has become a ghost town as authorities imposed a local lockdown after a spike in the number of cornavirus cases
But a family spokesman said: ‘We are open because everyone else is open. We closed for four weeks after the first lockdown in March but nobody has said factories need to close now.’ He added: ‘There is no clear guidance.’
It’s not just members of the Asian community that work in these factories. Bulgarians also make up a large proportion of the workforce.
Take Donka, 29, who earns £4 an hour as a packer in a number of garment factories. She too asks us not to reveal her surname as she tells a familiar story.
She said: ‘This is the busiest I’ve ever known it to be. The work is very hard and there is hardly any ventilation inside. Even when people are unwell they still go to work because they need the money.’
Mick Cheema, who owns an ethical clothing brand in the city called Basic Premier, said: ‘There is a history of unethical factories in the city. It has been widely reported but there has been no action from central or local government and it has become the norm.’
His views chime with the findings from a report published this week by Labour Behind the Label.
It said a worker told his employer that he tested positive for Covid-19 but was told to come in anyway and not to tell his colleagues of the test result.
So is it any wonder that the virus is soaring in this once proud city?
It is truly impossible to believe how this – and other abuses highlighted – could be happening in 21st century Britain.