Here are the top business, market, and economic stories you should be watching today in the UK, Europe, and abroad:
Quiz launches factory probe
Fast-fashion retailer Quiz (QUIZ.L) has suspended a supplier and launched a review of its supply chain after reports that workers were paid just £3 an hour to make jackets for the brand.
An undercover reporter for The Sunday Times was offered just £3 ($4) to £4 an hour to make clothing at a factory in Leicester where some clothing carried the branding of Quiz. The minimum wage for workers aged 25 and over in the UK is £8.72 an hour.
Quiz said in a statement on Monday it was “very grateful to the press for highlighting these alleged breaches”. The company said initial investigations suggest the work was illegally subcontracted without Quiz’s knowledge.
“We are extremely concerned and disappointed to be informed of the alleged breach of National Living Wage requirements in a factory making Quiz products,” Quiz chief executive Tarak Ramzan said in a statement. “The alleged breaches to both the law and Quiz's Ethical Code of Practice are totally unacceptable.
“We are thoroughly investigating this incident and will also conduct a fuller review of our supplier auditing processes to ensure that they are robust. We will update our stakeholders in due course.”
Shares in Quiz fell 6%.
Boohoo’s slide continues
Meanwhile, Boohoo’s (BOO.L) stock price rout continued apace on Monday morning.
The company was last week accused of benefiting from illegal factory conditions in Leicester in a separate Sunday Times investigation. On Friday, one of Boohoo’s biggest shareholders, Standard Life Aberdeen, ditched the company in response. Standard Life Aberdeen lambasted the response of Boohoo’s management as “inadequate” as it sold its shares in the company.
The Sunday Times followed up with a separate report over the weekend alleging Boohoo’s warehouse was a “breeding ground” for COVID-19. Boohoo has yet to respond.
Analysts at stockbroker Shore Capital reiterated a “sell” rating on the stock on Monday morning, saying: “There will be growing difficulty for ESG [ethical, social, and governance] investors in this arena.”
Shares in Boohoo fell another 14.1% on Monday morning. The stock has now fallen over 35% in the last fortnight, wiping almost £2bn off the company’s value.
European stock markets rose on Monday, ahead of a slew of third quarter earnings in the US this week.
“Traders are focused on the third quarter earnings season and the hope is that it will set more positive tone for the coronavirus stock market rally,” said Naeem Aslam, chief market analyst at Avatrade.
“Wall Street’s giants, JP Morgan, Bank of America, Wells Fargo, Goldman Sachs, BNY Mellon and Citigroup, will kick start the third quarter earnings season this week.”
Asian markets rallied overnight. Japan’s Nikkei (^N225) rose 2.2%, the Hong Kong Hang Seng (^HSI) added 0.6%, the Shanghai Composite (000001.SS) rose 1.7%, and the Shenzen Component (399001.SZ) rallied 3.5%.
Oil prices dipped on Monday morning, following reports that the OPEC+ alliance of oil producing nations could agree to pump more crude.
On Saturday (11 July), the Wall Street Journal reported that OPEC and its allies including Russia will face a push to ease oil production cuts introduced in April. The Journal, citing sources, said Saudi Arabia was leading a push within the organisation to increase production.
Saudi Arabia wants to increase oil production by 2 million barrels per day, according to the report. OPEC+ members will meet virtually on Wednesday (15 July) to discuss policy.