Boohoo is launching an independent review of its UK supply chain in response to allegations that some factories in Leicester that it uses paid workers below the minimum wage and failed to protect them from the Coronavirus.

The online fashion group, which owns brands including PrettyLittleThing and NastyGal, said the review will be led by Alison Levitt QC, with £10 million to be invested in “eradicating malpractice” in its supply chain.

A statement read that the board was “shocked and appalled by the recent allegations” and was committed to working to rebuild the reputation of textile manufacturing in Leicester.

Group chief executive John Lyttle added: “We will not hesitate to terminate any relationships where noncompliance with our code of conduct is found.”

The company will provide a supply chain review update in September, when it publishes its half-year results, with further updates due in January next year. It will also launch an independent third-party supply chain review, to be carried out by the ethical audit specialists Verisio and Bureau Veritas.

The review follows retailers including Next, ASOS and Amazon all removing Boohoo clothing from sale, while around £1.5 billion was wiped off the brand’s market value in two days.

Boohoo said it began to investigate allegations of worker mistreatment as soon as it was made aware of them, adding that to date it had not found any evidence of suppliers paying workers £3.50 a hour, or less than minimum wage - which is currently £8.72 for those aged 25 and over.

However, the company did find evidence that two of its suppliers had failed to comply with its code of conduct and it has terminated its relationships with both of those firms.

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