Fast fashion brand Boohoo has ordered an independent review of its UK supply chain following reports of poor working conditions at a factory in Leicester.
It comes after retailers Next and Asos dropped Boohoo goods from their stores amid claims workers were underpaid and not socially distancing.
The firm is also facing calls for a boycott on social media.
Boohoo, which said it was “appalled” by the allegations, has asked a senior barrister to lead the review.
It comes after a Sunday Times report claimed workers at a Leicester factory that supplied clothes to Boohoo were paid just £3.50 an hour, while being offered no protection from coronavirus.
The factory was also said to be operating during a localised lockdown designed to stop a spike in Covid-19 cases in Leicester.
Labour Behind the Label, a workers’ rights group, has separately claimed that some employees at factories in Leicester that supply the fast fashion firm were “forced to come into work while sick with Covid-19”.
Boohoo said it took “extremely seriously all allegations of malpractice, poor working conditions, and underpayment of workers”.
It said that Alison Levitt, a senior barrister who specialises in business crime, would lead an investigation looking into whether the company’s suppliers pay the minimum wage, and comply with coronavirus safety regulations, working hours rules and immigration law.
It will also spend an initial £10m “to eradicate supply chain malpractice”, with the help of audit and compliance specialists Verisio and Bureau Veritas.
The brand is popular with young women in particular, who it targets with marketing campaigns using Instagram “influencers” including contestants from the reality TV show Love Island .
That strategy could be in question, as the company was criticised on platforms including Twitter and Instagram using the hashtag boycottboohoo.
Former The Only Way Is Essex cast member Vas Morgan and model Jayde Pierce, distanced themselves from the brand in social media posts on Tuesday.Boohoo said in June that it expected sales to increase by at least 25% this year, a stark contrast to the struggles seen at many High Street retailers.
However, shares in the firm have dropped by almost half this week, diving 23% on Wednesday alone.
The company has grown rapidly since it was founded in Manchester in 2006 by Mahmud Kamani and Carol Kane.
Before the Sunday Times’ investigation the business was valued at about £5bn.