A group of activist investors and local councils are reportedly planning a £100 million lawsuit against Boohoo after a damning expose into the company’s alleged use of modern slave labour sunk the company’s value by more than £1 billion.

A report by The Sunday Times into the practice was published in 2020 and later verified by barrister Alison Levitt KC in an independent review in which she concluded that “allegations about poor working conditions and low rates of pay in many Leicester factories are not merely well-founded but substantially true”.

The review specifically looked at Boohoo’s Leicester supply chain and found that “senior Boohoo directors knew for a fact that there were very serious issues about the treatment of factory workers in Leicester and whilst it put in place a programme intended to remedy this, it did not move quickly enough.”

She concluded in September 2020 that the retailer did not feel “any real sense of responsibility for the factory workers in Leicester” because they were “largely invisible” to the wider business.

Three years on from that report, the Telegraph reports that City lawyers are seeking compensation for shareholders who suffered losses as a result of the allegations. While a claim is yet to be filed, the case could reach the High Court if a settlement is not reached.

The Telegraph report notes that Boohoo has appointed lawyers at Herbert Smith Freehills to lobby against the litigation. A spokesperson for the firm told the paper: “A formal claim relating to this matter has not been made. If any proceedings are issued in relation to this matter, they will be robustly defended.”

At the time of the report’s publication, Boohoo managing director John Lyttle called the problems “unacceptable” and said that the review had identified “many failings” with the company’s practices.

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