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Boohoo Found Negligent in Review of Suppliers’ Labor Issues

  • Independent review says fashion retailer ignored red flags
  • Shares surge as CEO says improvements won’t slow down company
Boohoo Group Plc's Market Value Slumps as Labor Abuse Worries Mount
Photographer: Hollie Adams/Bloomberg
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Boohoo Group Plc ignored warnings about significant labor violations at U.K. garment suppliers, according to an independent review that cleared the fashion retailer of direct involvement in any abuses.

Shares in Boohoo rose as much as 21% Friday, partially recovering from a stock slump that began in June. Investors focused on the report’s conclusion that Boohoo didn’t deliberately allow the conditions for workers to be underpaid and that its business model isn’t based on exploitation.