Boohoo stock price extends losses, now down 50% in July
- Boohoo is accused of paying its workers illegally low wages and failing to protect them from the pandemic
- Retailers Next, Zalando and Assos removed Boohoo clothes and brands from their stores
- Boohoo share price collapsed a further 25% today, totaling July losses to 50%
Shares of Boohoo Group PLC (LON: BOO) have plunged nearly 25% today to extend monthly losses to 50%. The fashion brand is facing accusations of paying its factory workers illegally low wages.
Fundamental analysis: Boohoo to launch an investigation into the state of working conditions
Retailers Next, Zalando and Assos decided to ditch Boohoo clothes from their stores after reports emerged that the Manchester-based firm paid workers below the minimum wage. Moreover, the retailer has been accused of failing to protect its workers from the pandemic.
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Boohoo, which owns brands such as Pretty Little Thing and Nasty Gal, faced harsh critics after some workers were allegedly paid £3.50 an hour in the Leicester factory. The minimum wage in the United Kingdom for 25+ workers is £8.72.
The retailer described working conditions as “totally unacceptable and fall woefully short of any standards acceptable in any workplace”. As a result, Boohoo pledged to open an independent review of its UK supply chain.
Alison Levitt, a senior barrister who specialises in business crime, has been selected to lead an independent investigation. He will seek to understand how much did Boohoo’s supplier paid workers. In addition, Levitt will look into compliance with coronavirus safety regulations, working hours rules and immigration law.
“We’ve got an extraordinary situation where some of the UK’s biggest, most profitable fashion brands are sourcing much of their clothing from UK factories where there is no transparency, no unions, and where they are under less scrutiny and are failing to disclose less about their supply chain than brands who source from places like Bangladesh and Cambodia,” said Thulsi Narayanasamy, a labour rights researcher at the Business & Human Rights Resource Centre.
Boohoo share price plunged almost 25% today, before recovering around half of these losses to trade 11% lower at 232p. Shares of the fashion brand are now trading nearly 50% in the red.
Boohoo stock price stopped at 78.6% Fibonacci support below the 200p mark. It marks a spectacular crash for Boohoo share price as it traded above the 400p handle just last week. The 78.6% Fibonacci support level will continue to offer support while a confluence of moving averages will present resistance just above the 300p mark.
Boohoo shares plunged a further 25% today, extending monthly losses to 50%. The Manchester-based firm is facing accusations of having poor working conditions for its workers, prompting major retailers Next, Zalando and Assos to ditch Boohoo clothes from their stores.