The fast fashion retailer Quiz has suspended a clothing supplier after a subcontractor in a Leicester factory was reported to be paying less than the minimum wage.
Quiz also said it would carry out a full review of its procedures for auditing suppliers after finding the supplier used the subcontractor “in direct contravention of a previous instruction”.
Fashion retailers have come under intense scrutiny following reports that some clothes factories in Leicester were paying less than the national minimum wage.
Quiz said it was “extremely concerned” and “very grateful to the press for highlighting these alleged breaches” after the Times on Saturday reported that an undercover worker was offered as little as £3 per hour in a Leicester factory in which Quiz-branded clothing was seen. The national living wage, the legal minimum for over-25s, is £8.72.
A spokesman for Quiz said the company had in 2018 asked an unnamed supplier to stop using a subcontractor, Orange Fashion Ltd, at the factory at Unit 8 Benson Street in Leicester, because of concerns over health and safety standards. That audit found no evidence of minimum wage violations and Orange Fashion Ltd was dissolved last year. However, the Quiz spokesman said it appeared the same location was then used again by a company called Noori Fashions.
Quiz said it was in the process of appointing a third-party inspector to carry out more regular audits of suppliers in the Leicester region.
Shares in Quiz slumped by as much as 21% in opening trading on the London Stock Exchange on Monday, before recovering to 6.4p, a decline of 5.2%. The latest share price fall means the market value of the Glasgow-based company, founded in 1993, is less than £8m, 97% lower than the £245m valuation it hit after floating on the stock market in July 2017.
Since floating, Quiz has struggled with falling profitability in its stores despite growth in online sales. Last month it carried out a pre-pack administration of the subsidiary that operated its 85 stores, in the hope of renegotiating leases as the coronavirus pandemic wiped out in-store trading. Only one store has so far reopened. Quiz employs about 1,500 people across the group, of whom 800 are store employees.
Tarak Ramzan, Quiz’s chief executive, said: “We are extremely concerned and disappointed to be informed of the alleged breach of national living wage requirements in a factory making Quiz products. 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.”
Quiz’s rival, Boohoo, lost as much as 40% of its market value last week after the Sunday Times highlighted working practices at one of its suppliers. A director of Morefray Ltd, the company at the centre of the allegations, was revealed by the Guardian to have links to one of Boohoo’s co-founders, Jalal Kamani.
The Gangmasters and Labour Abuse Authority, the government agency whose job is to protect vulnerable workers, last week said its officers had visited factories in Leicester to “discuss concerns and provide advice around how to protect workplaces from the risk of coronavirus” during the localised lockdown in the city.
However, the agency said that “officers have not at this stage identified any offences under the Modern Slavery Act 2015”.