Boohoo founder Carol Kane set to overcome shareholder row amid new “slavery” claims

nline fashion group Boohoo was today set to hold its AGM with co-founder Carol Kane expected to overcome a shareholder revolt to block her re-election as a director.

A proxy shareholder group has called on investors to oust her over the Leicester “modern slavery” scandal, but the majority of investors are expected to vote for her to stay on.

Meanwhile, three labour rights groups issued a joint statement accusing Boohoo of failing to take meaningful action to resolve issues of low pay and poor working conditions at factories in its Leicester supply chain.

Business & Human Rights Resource Centre, Labour Behind the Label and ShareAction said they had found “little evidence” Boohoo had addressed problems in its buying practices that caused poor labour practice. Namely, the company’s insistence on paying supplies low prices that drive illegally low wages.

The groups said: “Boohoo and enforcement agencies are trying to place the blame solely on exploitative suppliers, thus ignoring the central role Boohoo and similar brands play in generating and continuing the root causes of labour abuses and exploitation.”

They added that Boohoo had not offered to refund workers in the supply chain for the wages they had been underpaid and accused it of shifting UK work to Italy, Morocco and Pakistan where it could be “exporting a business model that results in poor labour practices in other countries.”

It called on Boohoo to provide evidence that all workers are getting paid the minimum wage, engage with trade unions to ensure organising within factories can take place and to move its shares from the lightly regulated Aim market to the main market of Stock Exchange and sign up to the UK corporate governance code.

Boohoo responded that it was an “absolute failure” of the three rights groups not to recognise any of the “substantial action” taken by the group by judge Sir Brian Leveson, KPMG and others to improve Boohoo’s supply chain work.

It said they were “completely out of touch and frankly incorrect” when they implied thousands of suppliers in Leicester were producing for Boohoo, saying the company had now cut that down to just dozens of firms which it was closely checking for workers’ rights.

“Sir Brian Leveson says that Boohoo’s continuous assessment of its UK manufacturing base is demonstrating a degree of due diligence which may well go beyond that which is undertaken by other retailers or in other industries.”

It said it was not standing in the way of unionisation and said it had set up a Textiles and Garment Workers Trust in Leicester with £1 million to “help champion workers’ rights”.

It denied quietly moving its supply chain out of the UK, saying while it had cut its suppliers here in number, it was shifting to fewer, bigger companies to make it easier to audit their workplace practices. Volumes of clothes bought from UK suppliers were broadly unchanged, it said.

“Unlike many others, who have turned their backs on UK manufacturing, Boohoo has faced into the challenges with an absolute determination to fix any problems,” it said in a statement.

Meanwhile, brokers at Liberum today said Boohoo’s shares were cheap and said the company’s progress on sorting out the supply chain issues (bracketed under environmental, social and governance factors, or ESG) “has positively surprised us and credit is warranted.”

He forecast growth this year 29% – ahead of the company’s own recent guidance of 25%.

“Our conclusion is that the shares still appear to have a large ESG discount built in.”