Online fashion retailer Boohoo said it was launching an independent review of its supply chain in Britain, led by a senior lawyer, following a media report about dire working conditions in one English factory that has hammered its shares.
Shares in Boohoo have lost about a third of their value since The Sunday Times newspaper said workers in a factory in Leicester making clothes destined for Boohoo were being paid as little as £3.50 an hour.
The review will be led by Alison Levitt QC.
Boohoo said it was also accelerating its independent third party supply chain review with ethical audit and compliance specialists, Verisio and Bureau Veritas, and would invest £10m to tackle the problem.
"We take extremely seriously all allegations of malpractice, poor working conditions, and underpayment of workers," it said.
"The group will not tolerate any incidence of non-compliance with its Code of Conduct or any mistreatment of workers, and will not hesitate to terminate relationships with any supplier who does not comply."
Boohoo said it would also welcome the opportunity to work with interior minister Priti Patel and local officials on any future investigations to help tackle labour malpractice in Leicester.