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Boohoo Share Price Soars 5% on Plans to Set New Model Factory

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Updated: 28 July 2020

Shares of Boohoo Group PLC (LON: BOO) soared more than 5% today after the fashion retailer announced plans to set up its own “model factory” to ensure staff are treated fairly. 

The firm has faced strong accusations about paying workers below the minimum wage and failing to protect its workers from the pandemic. As a consequence, retailers Next, Zalando and Assos decided to remove Boohoo clothes from their stores.

“If there’s stuff wrong in Leicester I’d rather find and fix it, not run for the hills,” John Lyttle, Boohoo’s chief executive, said.

“We terminated two suppliers as previously announced because of documentation issues which breached our code of conduct. No evidence of [paying as little as] £3.50 per hour was found,” said Lyttle. 

For this reason, the fashion retailer is working on setting up its own factory. It “will have the latest capital equipment and promote the highest standards of health and safety throughout the facility”.

The new factory is expected to have a capacity to produce 50,000 garments a week.

Boohoo share price soars on new factory plans July 2020